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Stock Market Decline Takes Shine Off 2011 IPOs

Six other companies that debuted this week raised less money than they expected. Stock in two of those companies, oil and gas companies Bonanza Creek Energy Inc. and Sanchez Energy Corp., are already 20 percent and 16 percent below their IPO prices, respectively.

Market watchers expect more big technology deals next year including Facebook, reviews site Yelp and online retailer Gilt Groupe. Of the three, only Yelp has filed to go public. But the global economic uncertainty may force the 200 companies hoping to go public in 2012 to temper their expectations. LinkedIn and Groupon, for example, sold less than 10 percent of their outstanding stock in their IPOs, which is considered a small percentage of overall shares to sale in an offering. The small supply helps create demand.

"If they want to get the company public, they'll do a smaller deal," said Frank Maturo, head of cash equity capital markets at Bank of America Merrill Lynch.

The IPO declines and weak stock markets may create an opportunity for investors to buy shares more cheaply as companies and bankers rethink prices for shares.

"People haven't made money in the IPO market, people are skeptical. But deals can get done if they get priced right," said Francis Gaskins, an analyst at IPOdesktop.

Copyright 2011 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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