Although eCost did lose money in the third quarter, IPO expenses were partly to blame and analysts said growth in revenue, customer base and orders was much better than expected. eCost is an online discount retailer. According to Renaissance Capital, 64% of the companies that came public in 2004 have been profitable compared to just 25% during the bubble. What's more, 2004's IPOs have been in business for 17 years on average vs. just 10 years in 1999 and 2000. Analysts also note that most of the IPO gains in 2004 came in the aftermarket, not on the first day of trade, meaning that ordinary investors have been able to make money even if they didn't receive initial share allocations. Volterra and eCost, for example, rose just 3% on the day they debuted but have since tacked on 194% and 171%, respectively. "A lot of these stocks were heavily discounted when they came to market," said Bard. "Underwriters were more disciplined in pricing and investors were pressuring companies to price them lower." On average, IPOs have risen 19% in the aftermarket this year, while the first-day pop has averaged 11%. That's way below an average first-day climb of 165% and an aftermarket return of 111% in 1999. The number of deals brought to market in 2004 and the value of those deals is also well below that of the bubble period. Still, it's clear that the IPO market has improved significantly this year. Both returns and deal volume are at their highest level in four years and 80% of IPOs are trading above their offering prices. David Menlow, president of IPO Financial Network, said this sets the stage for another good year in 2005. "There are a few economic issues that could unseat the market but there doesn't seem to be any event that would gnaw away at the foundation that's been built for the IPO market," he said.