First-Day Pops: Fewer and Not Quite as Loud

Ben Holmes has the market covered: Sundays: This Week in IPOs Tuesdays: This Week's Secondaries Wednesdays: Upcoming Lockup Expirations Fridays: The Quiet Period

Last week six IPOs managed to get themselves priced. This, despite the fact that Friday was a market holiday. On average, these six deals posted a 9.6% first-day gain, based on the closing price of the stocks. Compare this to the 35.7% average first-day performance from the previous week's nine deals. What does this tell us?

Well, two data points hardly add up to a trend, but we can say that fewer deals priced in the last two weeks than in any other two-week period since the beginning of the year. The decline in this week's first-day premiums is dramatic, but, as I said, two data points make for a pretty inconclusive chart.

The signal I was looking for this week was whether or not the market would step up and bid for IPOs from profitable companies. Last week, four of the six deals priced carried positive numbers in their net income columns (they were profitable). Only one of those traded to any significant premium. I guess profits are not the chicken soup cure someone thought they would be. Oh well, I live, I learn. ...