March 18, 2018
Bevin ‘unbelievably confident’ in state-funded Braidy Industries CEO with mixed record
By Morgan Watkins
Louisville Courier Journal
Ask Craig T. Bouchard about taxpayer-supported Braidy Industries and he’ll predict global success driving an Appalachian economic renaissance.
He’ll tell you he’s built three companies to at least $1 billion in revenue, each in 18 months, and that Braidy Industries will meet or beat that.
He may even tell you Braidy Industries, which plans a $1.5 billion aluminum rolling mill in Eastern Kentucky to open as soon as 2020, could hit the stock market this year at a phenomenal $50 per share – eclipsing IPO prices for Facebook and Visa.
The company, formed in August 2016, has yet to break ground for the planned 3 million-square-foot mill, but the company says it has already pre-sold over 160 percent of its future capacity to 10 customers it has declined to name. And in a speech in Vanceburg last November, Bouchard said Braidy is already planning a neighboring nanocrystalline alloy operation that could be “as big or bigger than the mill, eventually.”
Bouchard says Braidy will build the world’s lowest-cost mill producing top quality auto and aircraft aluminum. Its mill will employ about 600 people, he says, but could spark thousands more jobs across multiple generations and restore hope in one of the nation’s poorest regions as other companies move to be close to it.
“We chose here because of these families,” Bouchard recently told a Kentucky Baptist Convention publication. “I feel the weight of these 10,000 families on my shoulders every day.”
That’s a popular sentiment in Ashland.
“It means that these people will be home to play baseball with their kids on Saturday, and they won’t be living in motels and traveling back and forth, and their families won’t be strained,” said Mark Johnson of the Tri-State Building & Construction Trades Council, which hopes many construction workers it represents will get work building the mill.
In the past, people have pledged projects that never materialized, Johnson said in January, but he believes Bouchard will get the job done.
That promise of a big economic impact prompted Gov. Matt Bevin to secure an unusual incentive package for the business last year. In addition to offering up to $15 million in tax breaks commonly used to spur job creation, the commonwealth made a special $15 million direct investment of public money, making it a part-owner of the privately held company.
There are no guarantees, the governor told Courier Journal in January, yet he said he’s “unbelievably confident” Bouchard will deliver.
“This is a guy who has created jobs and created opportunities, and I look forward to the fact that he’s going to do it here in this state,” Bevin said.
Asked by Courier Journal to rate his own record, Bouchard responded through a representative: “Nearly everyone who has known and done business with Craig, trusts him and would answer this question with a one word answer: Spectacular.”
But federal corporate filings, court papers and press accounts of Bouchard’s past ventures show frequent predictions of spectacular success followed by financial problems and notable failures.
Most of Bouchard’s past ventures grew through mergers and acquisitions – stitching together existing companies to combine multiple revenue streams to make a single number that might be impressive in size, but isn’t always the best measure of long-term success.
Some of Bouchard’s rapid-fire deals left his companies mired in debt and swimming in red ink, no matter how much revenue they made. In some instances, companies foundered after he left.
Take Real Industry, his most recent venture before Braidy. In 2014, he boasted the company could one day emulate Warren Buffett’s phenomenal success as a “mini, mini, mini-Berkshire Hathaway.”
By mid-2016, Bouchard was out as CEO and chairman of the board. By late 2017, Real Industry – an international aluminum recycling business – had filed for Chapter 11 bankruptcy protection, citing “unsustainable debt service obligations” that largely originated during Bouchard’s tenure.
Bouchard also launched a company to market electric vehicles in China, and he championed a government-subsidized Chicago Cubs training complex in Florida. Both ventures fizzled.
His biggest claim to fame – a complex hostile takeover of a steelmaker – struggled financially, and a subsequent attempt to shore it up by buying a massive steel mill crumbled, spawning a lawsuit and hard feelings.
“No baseball player and no CEO bats 1.000,” said Robert Stucker, a top Chicago lawyer and Braidy investor. “The question is: Do they get more hits… than they do strikeouts?”
James V. Koch, a business associate and co-author of two books with Bouchard, gives him high marks.
“He may not be the most valuable player in the league, but he’s on the all-star team,” said Koch, a former Old Dominion University president who praised Bouchard’s ability to put deals together and attract talent.
John Boatright, a retired Loyola University Chicago business ethics professor, said Bouchard’s record might raise red flags in some minds but cautioned against jumping to conclusions.
“It is difficult to evaluate the quality of business leadership merely from a person’s record of successes and failures, even if it includes rapid entry and exit from various endeavors and an occasional bankruptcy,” Boatright said in an email.
MONEY AND STEEL
An international investment banker turned entrepreneur, Bouchard, 64, has a reputation for ambition and self-promotion. He’s co-authored two books about business and written a third, with a companion video game, for children.
He’s been linked to famous people, including Chicago billionaire Sam Zell; music legend Quincy Jones; and the late Clifford Perlman, who made Caesars Palace in Las Vegas a world-class resort but was forced out over alleged ties to organized crime.
Bouchard isn’t shy about touting his business record and sharing details of his personal life on Facebook and Twitter, in personal appearances, in press interviews or through his personal website, www.craigbouchard.com.
But he declined to be interviewed for this article. Courier Journal emailed him a series of questions, starting on Jan. 31. In response, Bouchard sent one of his books, a handful of news clips and a few supporting documents. A Braidy executive provided long written responses, but often repeated a blanket statement from Bouchard:
“Neither I (nor my companies) ever comment in the press about specific companies, competitors, suppliers, creditors, customers, employees, or newspaper reporters, whether we like them or not. Privacy is more important in today’s social media invaded world than ever before.”
Raised in Kansas City and suburban Chicago, Bouchard earned a master’s degree in economics from Illinois State University and an MBA from the University of Chicago. He worked for nearly two decades at the First National Bank of Chicago, where he spent time in Asia and became a senior vice president.
His first stint as a CEO began in 1998 at Numerix, a successful financial software company he helped found. He left in 2003 and joined his brother, steel-industry executive James P. Bouchard, in building Chicago-based Esmark, a company with more than 3,700 employees in 2007.
Esmark launched with $750,000 cash and a $1.9 million loan, Bouchard and Koch recount in America for Sale: How the Foreign Pack Circled and Devoured Esmark.
Private investors backed Esmark, which quickly snapped up several steel distribution companies, turning a profit and becoming an industry player. But the shopping spree didn’t stop there, and Esmark’s biggest acquisition led to its undoing.
In late 2006, the Bouchards won control of twice-bankrupt steelmaker Wheeling-Pittsburgh Corp. through a rare form of hostile takeover that Stucker, the Braidy investor, called a “hall-of-fame-level” accomplishment.
But closing the deal was just the first challenge.
“Few thought that an organization as small as Esmark could take on a project of this complexity and scale…(but Esmark’s biggest shareholder and the United Steelworkers) essentially bought into the strategic vision, personal charisma, ability, and promise of the Bouchard brothers,” Bouchard and Koch wrote. “Perhaps most important, the Bouchards themselves had no fear and were brimming with confidence that they could pull this off.”
The plan was to cut costs and boost profits by feeding Wheeling-Pitt’s steel through Esmark’s successful distribution network, but things didn’t go as planned.
“By the time we acquired (Wheeling-Pitt), it was far worse than we expected,” James Bouchard told The Associated Press in 2007. “We came into a hornet’s nest.”
The brothers discussed but rejected “putting the company in bankruptcy” to get it on the “right track,” according to Bouchard’s book. He blamed a common problem in hostile takeovers: They had no access to relevant information about Wheeling-Pitt’s internal situation for over a year before taking control.
Wheeling-Pitt reported net sales of nearly $1.8 billion but net income of only about $6.5 million in 2006, Securities and Exchange Commission documents show. The company was also contending with nearly $400 million in short- and long-term debt.
During a March 2007 earnings call reminiscent of his current pledge to help revive Eastern Kentucky’s economy, Craig Bouchard indicated he and his brother wanted to rebuild communities that “suffered over the last few decades of a difficult steel industry.”
But the bad news kept coming. Wheeling-Pitt reported a net loss of about $101.5 million for the first half of 2007. Accounting firm PricewaterhouseCoopers expressed substantial doubt about its “ability to continue as a going concern.”
That warning is “usually predictive of default and bankruptcy and so on,” said Indiana University accounting professor Daniel Beneish.
To staunch the red ink and secure a reliable supply of steel slabs, Esmark decided to buy yet another mill.
Through E2 Acquisition Corp., an associated company headed by Craig Bouchard, Esmark offered ArcelorMittal USA about $1.3 billion for its Sparrows Point mill near Baltimore.
“It is one of the great steel transactions of this decade in my opinion,” Bouchard told Wall Street analysts in August 2007.
But the deal collapsed a few months later, and Russian giant OAO Severstal scooped up Sparrows Point for just $810 million as the Great Recession took hold.
In a breach of contract lawsuit, ArcelorMittal accused E2 of driving away its own investors. The plan to shore up Wheeling-Pitt by selling it Sparrows Point steel at below-market prices violated E2’s stockholder agreement, the lawsuit said.
ArcelorMittal also accused E2 of improperly failing to tell the seller that its financing was in trouble. E2 and Esmark denied the allegations and countered in court papers that ArcelorMittal violated the purchase agreement, “thereby excusing E2’s performance…”
ArcelorMittal wanted around $540 million in damages – the difference between the E2 and Severstal offers. The case was settled out of court on confidential terms.
“We each paid our legal fees and folded our cards,” Bouchard said in a written statement.
But by that point, the Bouchards were no longer in control of Esmark’s steel operations.
Despite Wheeling-Pitt’s widely known financial woes, the Bouchards expressed confidence that merging with Esmark would help turn it around. Instead, the November 2007 merger pushed Esmark into the red.
In SEC filings, Esmark reported pre-merger net income of about $11.8 million in 2004; $4.7 million in 2005; and $3.5 million in 2006. Post-merger, Esmark reported a 2007 net loss of roughly $9 million, followed by a $15.8 million net loss in first-quarter 2008.
The post-merger business had impressive assets and profitable steel service centers, but it was “almost a basket case financially,” Bouchard and Koch wrote. “By all odds, Esmark was vulnerable to a takeover, hostile or otherwise.”
Several companies approached Esmark about a sale, Bouchard and Koch wrote. The company’s board favored an offer from an Indian steelmaker. United Steelworkers, which had a say in any sale, and Franklin Mutual Advisers, which owned about 60 percent of Esmark, both preferred Severstal’s bid.
Koch said economic warning signs, which the Bouchards saw, factored into the sale decision, as did the company’s finances and aging assets.
“None of us thought we were on the board of Google at that point,” he said. “We were talking about an enterprise that faced lots of challenges… “
Severstal eventually won Esmark for $775 million plus around $400 million in assumed debt. The Bouchards temporarily left the steel industry.
In describing their company’s devolution today, the brothers accentuate the positive. Esmark’s website says the company started with $4 million in revenue and achieved “2008 revenue of $3 billion” when it demonstrated “its commitment to shareholder value” by selling.
Craig Bouchard’s personal website uses similar definitive terms but sets Esmark’s 2008 revenue at $3.5 billion. Last August in Louisville he claimed $4 billion in revenue.
When asked about the $1 billion difference in numbers, Jaunique Sealey — Braidy’s executive vice president of business development — said the figures are all accurate, based on accounting methods acceptable to Wall Street.
The bigger numbers represent projections of what Esmark’s annual revenue would have been if the company hadn’t sold to Severstal in August 2008. At the high end, the estimate would be “a little less than $4 billion,” she said.
Beneish, the IU accounting professor, questioned the value of annualized estimates.
“I don’t see the point of projecting sales past the point where the company was sold,” Beneish said.
“If sales were what they were, then that’s what they are,” he said. “Are they using the sales numbers to create a favorable impression on their abilities?”
The lowest revenue figure, $3 billion, is based on the last 12 months before the sale, Sealey said.
Beneish and Steven Orpurt, an Arizona State University accounting professor, looked at Esmark’s major SEC filings at Courier Journal’s request.
Beneish said he would find it difficult to calculate $3 billion in 2008 revenue by extrapolating from Esmark’s reports for 2007 and the first quarter of 2008. Similarly, Orpurt said he couldn’t calculate $3 billion, based on numbers in available SEC reports.
Orpurt said Esmark’s revenue might have gone up if the company posted stellar sales in the quarter before the sale, but no data for that period was reported to the SEC.
Sealey said Esmark/Wheeling-Pitt set an all-time record for profitability during that quarter, but provided no specific numbers for profit or revenue.
The Bouchards won United Steelworkers’ support for the Wheeling-Pitt takeover in part by promising not to sack union workers, but the relationship soured after Esmark began planning layoffs in 2008. Still, David McCall, longtime director of USW’s Ohio-based District 1, said Craig Bouchard “lived up to his word in terms of the collective bargaining agreement with us.”
Severstal came along at the right time for Esmark, shortly before the economy tanked in the Great Recession, he said.
“A blind squirrel finds a nut, and that’s exactly what they were,” McCall said.
George Geis, faculty director of the University of California, Los Angeles mergers and acquisitions executive program, said Esmark’s pre-acquisition due-diligence on Wheeling-Pitt “probably could’ve been a little more careful.”
“Just like before people get married, there’s uncertainty,” he said. “You want to try to be sure you understand what you’ve got here.”
Koch, Craig Bouchard’s co-author, praised the Bouchard brothers’ ability to handle unexpected challenges and high legacy costs such as pension obligations.
“They did turn Wheeling-Pitt around sufficiently that the Russians were willing to pay a pretty decent price for it when it was sold,” he said.
Esmark’s common stock closed at $9.28 per share on NASDAQ on Dec. 17, 2007, Bouchard said in his book. Severstal agreed to pay $19.25 per share about six months later.
The brothers, who owned about 3.2 percent of the company’s common stock, each took home millions of dollars in pay, severance and stock sale proceeds.
But in his book, Bouchard acknowledges others didn’t fare well after the sale.
“While the shareholders did very well, the people did not,” Sealey added in an email. “When the recession hit, much of the company was eventually scrapped by the OAO Severstal acquirer. The employees in West Virginia and Ohio lost their jobs.”
Who bears the most responsibility for Esmark’s rapid rise and fast fall in 2008 remains unclear. The Bouchard brothers are no longer on speaking terms, and disagree on even basic descriptions of their business relationship.
James Bouchard eventually returned to the steel industry, revivng Esmark as a solo act. A company history on the Esmark website lists James as a founder, with no mention of Craig at all. James Bouchard, Chairman and CEO of the company, declined an interview request, but his company issued a terse statement:
“Esmark was founded by Mr. James Bouchard. Craig was hired in 2004 and reported directly to James. During his brief tenure, Craig’s primary role was to support the company’s financial management, which included record-keeping, reporting and planning. In 2008, Craig’s employment at Esmark ended.”
Craig Bouchard, who was president and vice-chairman of Esmark in 2008, disputes that description.
Bouchard maintains he was a co-founder. He saw his brother as a partner and never reported directly to him, Sealey said. He oversaw strategic planning and finance, among other things, while James worked on sales and operations, she said, and they built Esmark with a team of “brilliant steel guys,” including a current Braidy executive.
When Esmark was rebooted, Craig invested $1 million and took a seat on the board – for just one meeting in 2010, Sealey said.
“He listened for most of the meeting, then announced that he did not believe he could fairly uphold his fiduciary duty to its shareholders,” Sealey said, noting that he resigned and later sold his Esmark stock.
“Craig has had no involvement in Esmark-2 since that day,” she said. “He has also not spoken to his brother since that day.”
After the Severstal sale, Bouchard turned his attention to a development built around the Chicago Cubs.
Bouchard’s company owned the Naples Bath and Tennis Club in Florida, where he bought a $4.8 million mansion. (He and his wife, Melissa, are avid tennis players. She’s in the University of Kentucky Tennis Hall of Fame.)
Bouchard secured a zoning change to allow a hotel at the club. He also fronted an effort to bring the Cubs’ spring training camp to Naples, where his group proposed building a stadium partially financed by tourist tax revenues. The group would make money on retail and restaurant developments around it.
“I think we’ve got a chance to do something magnificent, build the best facility in existence… ,” Bouchard told Metal Center News in 2010. “For the Cubs, it’s a home run.”
The plan struck out. The stadium effort was dropped when the Cubs decided to stay in Arizona. No hotel was built. The bath and tennis club was shuttered in 2010, and Bouchard’s Tennis Realty LLC gave the property to a bank in lieu of foreclosure.
Sealey said Bouchard “pursued this effort (to relocate the Cubs) as a hobby and a love, and to help his community… Craig’s group narrowly lost when the Cubs received a fabulous offer to remain in Arizona…”
She said Bouchard bought into the tennis club with other investors “to save it and its surrounding community from bankruptcy,” and recruited the current owner.
“The club and the community that it serves have never been stronger,” Sealey said.
The current owner of the club did not respond to requests for comment.
Last year Bouchard put his Naples home on the market. It’s currently listed at $4.2 million. He recently declined to say where he lives, citing concern for his family’s privacy and security.
‘RENAISSANCE IN MANUFACTURING’
As the Cubs’ relocation prospects faded, Bouchard in 2010 founded Shale-Inland, which quickly bought several stamping and fabricating businesses as well as Main Steel Polishing Co.
Again, Bouchard’s optimism took flight.
“Our vision is a renaissance in manufacturing,” Bouchard told American Metal Market in 2011, calling Main Steel a “crown jewel asset” and saying Shale-Inland planned to grow through cash acquisitions.
Shale-Inland’s revenues reached between $800 million and $1 billion during Bouchard’s tenure, Sealey said.
But Bouchard’s time at Shale-Inland was short.
In 2012, the company was bought by two major investment firms and combined with an industrial pipe, valves and fittings operation. With Bouchard still CEO, Shale-Inland took on long-term debt, selling about $250 million in senior secured notes due in 2019.
More background: Kentucky’s effort to invest public money in private businesses flies under the radar
Bond ratings firm Moody’s Investors Service in the fall of 2012 expressed concern about factors that included the amount of debt. It rated Shale-Inland and its bonds at B3 – subject to high credit risk.
Bouchard was gone by the end of February 2013. American Metal Market said he was “reluctant to address in detail what prompted his change in direction,” beyond wanting to explore opportunities in China.
“Shale-Inland is positioned perfectly where I wanted it… ,” he told the trade publication.
Shale-Inland eventually sold Main Steel and other Bouchard-led acquisitions. The company, renamed FloWorks International, last year refinanced roughly $220.9 million in debt issued during Bouchard’s tenure.
Bond rating firms continued to express concerns about FloWorks’ debt, according to the Troubled Company Reporter and Moody’s reports. FloWorks’ chief commercial officer Rob Beardmore declined comment.
Sealey said Bouchard “has no basis to comment” on Shale-Inland, and noted that he has had no involvement with the company for more than five years.
PIVOT TO ASIA
Bouchard did explore opportunities in Asia, forming Cambelle-Inland LLC. Operating from Naples, Bouchard said the company “orchestrated discussions with several companies” about making electric vehicles for China and beyond.
“Cambelle-Inland wants to take on the world’s largest industrial pollution problem…” Bouchard told American Metal Market in mid-2013. “If we are successful, you will find these vehicles in India, Indonesia, Mexico, Thailand and other parts of the industrializing world.”
A Cambelle-Inland website said, “During the past many months I have worked on assembling technologies and companies that can attack this environmental disaster. If not people like me, then who?”
Cambelle-Inland’s celebrity board included Quincy Jones, who was involved with entertainment for the 2008 Beijing Olympics; Yue-Sai Kan, a television star and producer in China; and Perlman, of Caesars Palace fame. Jones’ production agency did not respond to a request for comment. Kan declined comment.
Cambelle-Inland also announced it would advise China Gerui Advanced Materials Group Ltd. on overseas expansion.
“We have been following and investing in the company for the past two years… and even in today’s turbulent China marketplace, China Gerui’s business remains profitable and strong,” Bouchard said in a May 2013 press release, when that company was trading at around $21 per share.
Today, China Gerui’s stock trades for around 2 cents per share.
Nor did Cambelle-Inland blossom. Public records in Florida and Delaware show it is defunct. Bouchard declined comment when asked if the company ever produced or sold electric vehicles or any other product.
BUYING INTO ALUMINUM
In the Esmark book, Bouchard and Koch warn that hostile takeovers are “generally not a good idea,” but in 2013 Bouchard launched another one.
Once known as Fremont General Corp., Signature Group Holdings was a subprime home mortgage lender before the 2008 crash. With Chicago real estate mogul Sam Zell as a major shareholder, its primary asset was its own failure – about $900 million in operating losses that will reduce future tax liabilities if it can make money.
“My goal is to make another Fortune 500 company,” Bouchard told American Metal Market shortly after taking control of the company in 2013.
With Bouchard as chairman and CEO, Signature borrowed heavily to buy an international aluminum recycling operation with about 1,700 employees for about $550 million in 2015.
Signature changed its name to Real Industry. During his tenure as CEO, Real Industry reported net earnings of $5.5 million in 2014, followed by net losses of about $6.9 million in 2015 and $11.2 million for the first six months of 2016.
A look at Braidy Industries’ headquarters in Ashland, Kentucky
Its stock on the NASDAQ exchange peaked at $13.50 on June 19, 2015, before starting a long slide. On Aug. 22, 2016, with shares trading in the $8 range, the company issued a press release saying Bouchard was resigning.
“I want to thank the management team and all employees who worked tirelessly to grow the company from $40 million of annual revenue to roughly $1.4 billion of annual revenue on two continents over the past two years,” Bouchard stated in a press release. “The Board of Directors and I share a different vision for the path of growth going forward… “
Bouchard was paid at least $2 million through a separation agreement, according to SEC filings. Neither Zell nor Real Industry officials would comment for this article.
Real Industry’s fortunes continued to slide after Bouchard’s departure. It reported about $1.25 billion in revenue in 2016 but filed for Chapter 11 bankruptcy protection last November, citing market forces and an inability to refinance or meet obligations on $305 million in debt dating to Bouchard’s tenure, among other issues.
“The more debt you put on, the higher the risk for default,” said Christopher Kummer, president of the Institute for Mergers, Acquisitions and Alliances, an international research and educational organization.
It usually takes about two years after an acquisition to tell if it’s a success, Kummer said.
“Any transactions made during Craig’s tenure at Real Industry are most proximately affected by the management of Real Industry over the nearly two years since his departure,” Sealey said, noting the company acquired another aluminum operation after he left.
Real Industry stock now trades over-the-counter at around 30 cents per share. Its creditors are likely to take its assets.
Bouchard, however, predicts better days for his former employer.
“Real Industry was a great company the day I resigned, it is a fine company today,” he said through Sealey. “It maintains a world class customer base and has a bright future.”
Within days of leaving Real Industry, Bouchard started building Braidy Industries. Some executives from his past companies soon came on board.
“Each of us re-joined Craig without hesitation in his mission to rebuild Eastern Kentucky,” said Sealey, who ran a cosmetics company owned by Real Industry.
Bevin and a wide array of elected officials express faith in Bouchard’s ability to deliver that economic game-changer.
“There’s nothing in his background that is that particularly different than anybody else who’s had success in the world of business,” Bevin said in mid-January.
The Kentucky Cabinet for Economic Development does due diligence research on businesses and people who own at least 20 percent of the business before it gives economic development incentives, said agency spokesman Jack Mazurak. That process involves criminal background and credit checks, public records searches and reviews of company finances and business plans.
“The governor himself was involved (in recruiting Bouchard), and the two of them have gotten to know each other and gained confidence (in each other),” Mazurak said.
Winning Bevin’s trust – and taxpayer money – is a big help in getting the company off the ground.
“That’s an important consideration to know that a state government is going to be behind you,” Koch said. “Strategically, I think that was a coup.”
Braidy earlier this month announced completion of a $75 million private sale of stock, with $18.5 million of that from Bouchard himself. It also finalized its acquisition of Veloxint, a small Massachusetts company holding a nanocrystalline alloy patent. Veloxint was founded by Christopher Schuh, a Braidy investor and director. Terms of the transactions were not disclosed.
It’s unclear how Braidy will finance the $1.5 billion mill, though Bouchard recently told The Daily Independent in Ashland about 60 percent of the cost would be debt.
One way companies raise money is through an initial public offering of stock.
In October, Bouchard told Courier Journal that Braidy planned a stock IPO during construction, in the first quarter of 2019.
But in a December email he told an investor the IPO could happen this year. The email was sent to Courier Journal in what appears to be a “reply all” error.
Bouchard also told the investor that a global investment bank thinks the stock could list at $50 per share. The investment bank declined comment.
“Just looking through (Bouchard’s) bio, he’s been a pretty successful serial entrepreneur. The only black mark is this recent bankruptcy.”
Michael Dambra, a University at Buffalo
“It’s safe to say that it’s pretty rare that it’d be that high,” said Matt Gustafson, assistant professor of finance at Penn State, noting that IPOs typically debut at $15-to-$30 per share.
University of Kentucky finance professor Brad Jordan said IPO prices are arbitrary but historically hover at around $12, though he’s noticed a possible upward trend as some see pricier IPOs as a higher-quality investment.
Riskier ventures that can’t easily secure bank financing tend to launch IPOs, Jordan said. The United States typically sees hundreds of IPOs annually, but most of those businesses founder within five years, he said.
Only a handful of metals companies have gone public on U.S. exchanges in the past few years, said Michael Dambra, a University at Buffalo assistant professor who researches IPOs.
Bouchard’s role in taking now-bankrupt Real Industry public could concern prospective investors, Dambra said, but the positives probably outweigh the negatives.
“Just looking through his bio, he’s been a pretty successful serial entrepreneur,” he said. “The only black mark is this recent bankruptcy.”
John Preston, a Braidy board member who previously worked for MIT, said in an email that he analyzed the ups and downs of Bouchard’s past companies and found that his role was “universally positive.”
Stucker, the Braidy investor, said that he’s talked with aluminum-industry veterans and believes Bouchard’s latest venture will be a “great manufacturing breakthrough…”
“These things are always risky,” Stucker said. “Being in business is never easy… If it was easy and foolproof, everyone would do it.”