IPOs Mostly Duds
What was supposed to be a big show of strength in the new-issues market fizzled Wednesday, bolstering concerns that the IPO craze of 2006 might have seen its best days.
"Looking at the past month, the fact that the majority have priced below the range makes you think the IPO market is softening in lockstep with the equity market," said Doug Lovett, equity analyst at Morningstar. "At the same time, we've seen a couple of IPOs withdrawn because companies weren't happy with the price."
J. Crew was the notable exception Wednesday, its shares jumping nearly 25% on their first day of trading. The company priced 18.8 million initial shares at $20 apiece Tuesday night, topping the expected range of $15 to $17 a share and raising about $376 million for itself and its private-equity backers. The offering cut the ownership stake of major shareholder Texas Pacific to about 40% from just above 50%.By late morning, the stock had shot up $4.92 to $24.92, with more than 15 million shares changing hands. But other deals had more trouble. Three of the companies that priced IPOs Tuesday night cut their offering price -- in one case by more than 30%. PGT (PGTI) originally anticipated pricing between $16 to $18 a share, but ended up going out at $14. Meanwhile, Omniture (OMTR) priced at $6.50 per share, below the $7.50 to $9 a share range. Replidyne (RDYN) issued shares at $10 a share, $4 below the lowest range of its $14 to $16 price.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV