Just as you might have expected, this week is tiny; just two deals are slated to price. Both of them are pretty much low-end merchandise from small, low-end underwriters. Normally I wouldn't expend much effort to point out the lack of quality in such deals. I thought, however, that it was important, given that they are the only deals in the queue this week. This makes them particularly problematic for me. Here's why.
Recently, when coming off of long holiday breaks, buyers have succumbed to a sort of temporary insanity brought on, I think, by an acute lack of deal flow. In other words, after a few days off folks tend to get hungry for IPOs and will buy anything that they can get their hands on. Don't give in to this temptation -- not with these, or any other deals. The year is young and there is a huge syndicate hopper chock full of upcoming quality offerings. Be patient and keep your powder dry. The fun starts next week!
Let's take a look at the deals this week:
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. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Holmes appreciates your feedback at email@example.com.