Last week’s traffic clearly signaled a shift in the trade winds sweeping through the Valley of IPOs. The cannonball run for the biotech sector looks like it’s over, but another sector is opening – technology.
IPO players are ready to join the running of the biotechs through the canyons of Wall Street this week. Eleven of the 14 IPOs that are on the calendar are biotechs. And last week’s traffic was dominated by – yes – biotechs. Four of the eight IPOs that were priced were from this sector. A couple scored opening-day moonshots.
The days of the biotech and biopharma companies are coming to Wall Street. Three of the six IPOs on this week’s calendar are bio-IPOs and eight – yes, eight – of next week’s 10 IPOs are bio-IPOs. The emergence of this industrial sector should not be surprising. It has been sizzling.
The Martin Luther King, Jr. Day Holiday shortens this week’s trading sessions to four days and pushes the IPO traffic back to the end of the week. But something happened on the way to market. The pricing of a billion-dollar deal was accelerated. The usual reason for acceleration is strong investor demand.
This year’s IPO market got off to a fast start. On Tuesday morning, an amendment was posted on the U.S. Securities and Exchange Commission’s filing window announcing expected pricing terms for what proved to be 2014’s first IPO. The deal jumped onto the calendar for a Thursday evening pricing, started trading Friday morning, and popped for an opening-day gain of 12.6 percent. In the meantime, the SEC’s filing window started spitting out deal after deal plus pricing terms after pricing terms. By week’s end, the calendar had eight IPOs expecting to raise over $3.7 billion.
“Past performance is no guarantee of future results” has been the disclaimer of the mutual funds industry as long as anyone can remember. The same can be said for the IPO market. Late last summer, the U.S. Securities and Exchange Commission filing window started giving off signals of a coming hot IPO market. It happened. Over the last three weeks, the SEC filing window started sending the same signals – again.
The champagne corks were popping on the corner of Broad and Wall Streets as the IPO market closed out 2013. The IPO year turned out to be the busiest since 2004. And there’s more good news. There are no signs of an IPO bubble in those fizzy champagne glasses.
Circle December 18 on your calendar. That’s the last stopping day for the IPO market in 2013. Two deals are scheduled to make their debuts on Wednesday. And then it’s home for the holidays.
The IPO market saddles up this week for the year’s last big sleigh ride through the canyons of Wall Street. On tap are 10 deals, with bankers expecting to raise $4.6 billion. Over half are said to be on somebody’s “most wanted” list.