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
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
thought they would be. Oh well, I live, I learn.
This week is light. Many of the syndicate departments have put their calendars on a blanket TBA (To Be Announced) status. As it stands, we show 11 deals slated to price this week. Come Monday, there's a chance that a few more names will be added to the queue.
Let's take a look at the deals:
Ben Holmes is the founder of
ipoPros.com , a Boulder, Colo.-based research boutique (now a wholly-owned subsidiary of TheStreet.com) specializing in the analysis of equity syndicate offerings. This column is not meant as investment advice; it is instead meant to provide insight into the methods of new and secondary offerings. Neither Holmes nor his firm has entered indications of interest in any of the companies discussed in this column. Holmes' This Week in IPOs column appears Sundays, This Week's Secondaries appears Tuesdays, Upcoming Lockup Expirations appears Wednesdays and The Quiet Period appears on Fridays. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Holmes appreciates your feedback at