Last week, I mentioned a recent study that we did on quiet-period endings and the effects they were having on the underlying stocks. I was rushed on Friday and on my way out of the office, so I threw up the article and a teaser telling readers to watch the TV show this weekend for the results of our study. Well, 214 of you wrote in to tell me that you cannot, for one reason or another, watch the show and could I please post the data to


Well, most of you said "please."

A few people called me names. One man accused me of being an unethical shill for the "United States Television Power Structure." I've not heard of this organization, but assume that it's a pretty ruthless group and that this comment was intended as an insult. Anyway, I already have the data and as so many of you did ask nicely, here it is.

Since April 1, the beginning of Q2, 54 IPOs have ended their quiet periods. All 54 of these have had research coverage initiated by one or more of their underwriters, usually within a day or two of the QP end.

The first-day gain on these IPOs was a solid 59%. This means that if you bought one share of each of these deals at the IPO price and then sold at the close on the first day of trading, you would have walked away with a 59% gain. So, we're not talking about a bad period in the IPO market -- the deals in this group were above-average performers.

Now, if you'd taken those very same stocks and bought one share of each at the close on the day the underwriters first recommended them, today you would be down more than 23%.

Of the 54 deals we researched:

  • Fact: Not one received a negative or even a neutral opinion by the underwriters. Across the board we saw ratings of "buy," "strong buy," "market outperform," "near-term buy," "long-term buy." The underwriters are clearly and consistently recommending that you buy these recently issued stocks. There is no other way to interpret the data.
  • Fact: Only 12 of these stocks have made gains since they were first recommended -- that means the analysts at the firms are batting barely 22%! And, the average gain on those 12 stocks was less than 18%. The recommendations that did result in gains posted relatively small returns.
  • Fact: Forty-two of the 54 stocks we looked at -- 78% of them -- have lost value since they were recommended. The average loss on these stocks was close to -31%.

The bottom line is that investors who are taking the advice of the analysts on these deals as they exit their quiet periods are getting their teeth knocked out and handed to them in a cup. This is a crass way to put it, but the image I paint is almost as painful as the reality shown in our data.

There are a number of good-looking deals this week. Last week went well and I'm thinking, "Game On!" Let's take a look:

Ben Holmes is the founder of , a Boulder, Colo.-based research boutique (now a wholly-owned subsidiary of 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