Stabilizing Stock Market Giving IPOs A Boost
NEW YORK (AP) ¿ The IPO market is set for its busiest week in more than two years as a steadier stock market and the success of one deal is encouraging more companies to sell shares to the public.
Companies planning initial public offerings have had a rough time this year as turbulent stock markets sapped investors' appetite for risk. Wary buyers demanded heavy discounts on shares of companies burdened with debt, lacking operating histories or slow growth.
Nineteen companies have gone public in 2010, while 10 companies have postponed or withdrawn their offerings. Nearly 60 percent of those that pushed through to market accepted less for their shares than they had expected.But as the stock market gradually moves higher after a volatile start to the year, more companies are lining up to go public. The Standard & Poor's 500 index, after slipping in January, is now up about 4 percent for the year. "Investors are becoming less critical because the crash is further behind us," said IPOdesktop's Francis Gaskins. "People need to invest their money and the stock market is up." Banks are also starting to offer more appealing companies, according to IPO market tracker Scott Sweet of IPOBoutique. This week, Financial Engines Inc., whose shares shot up 44 percent in its debut Tuesday, was the first solid success of 2010. It had a prominent founder in Nobel winner William Sharpe, a niche market advising small investors, and the assets it managed were growing fast. Other companies whose prospective IPOs are generating buzz include electric car maker Tesla Motors Inc., prepaid financial services company Green Dot Corp., video game rental service GameFly Inc., options exchange CBOE Holdings Inc. and wireless network provider Meru Networks Inc. Meru hopes to debut during the last week in March, while the other companies have not yet set a date.
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