IPOs Heat Up

The IPO market heated up again Thursday, with the first three offers since last week's Orbcomm (ORBC - commentary - Cramer's Take) disaster. The satellite company dropped below $8 a share today, and is nearly 30% below its IPO price.

Today's largest offering, investment bank KBW (KBW - commentary - Cramer's Take), was also the most successful. Better known as Keefe, Bruyette & Woods, the company issue was up about 29% after pricing 6.8 million shares at $21. Ironically, KBW was the lead banker on its own deal, along with Merrill Lynch (MER - commentary - Cramer's Take).

Physicians Formula (FACE - commentary - Cramer's Take) also priced 7.5 million shares overnight at $17, which was at the high end of the expected range. The company claims it's one of the 10 largest U.S. cosmetics companies in the mass-market channel. Physicians' revenue grew 18% year-over-year in the first half of 2006, as the company had about 7% share of its market. The stock posted a double-digit gain, despite closing 2 points lower than its session high.

Finally, Canadian Solar (CSIQ - commentary - Cramer's Take) sold 7.7 million shares last night at $15. The stock opened just 3% higher, but continued to gain throughout the session. Despite its name, all of the company's solar module manufacturing operations are in China. Canadian Solar is already profitable, and posted impressive 270% year-over-year revenue growth in the first half of 2006.

P.S. Looking ahead to next week, Hertz Global (HTX - commentary - Cramer's Take) and the Nymex (NMX - commentary - Cramer's Take) will be the hot offerings.

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Please note that due to factors including low market capitalization and/or insufficient public float, we consider Orbcomm, KBW, Physicians Formula and Canadian Solar to be small-cap stocks. You should be aware that such stocks are subject to more risk than stocks of larger companies, including greater volatility, lower liquidity and less publicly available information, and that postings such as this one can have an effect on their stock prices.

In keeping with TSC's editorial policy, David Peltier doesn't own or short individual stocks. He also doesn't invest in hedge funds or other private investment partnerships.

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David Peltier is a research associate at TheStreet.com. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Peltier appreciates your feedback; click here to send him an email.

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