All the stars are falling into place for a revival of the new-issues market. Last week’s IPO aftermarket performance was the icing on the cake. Here’s what the “CSI” evidence tells us:
Any banquet starts with an appetizer. So far this year, the IPO market has given us two tasty morsels. This week, bankers plan to add more appetizers to the 2009 IPO menu.
“Coyote ugly” was the only way to describe the securities markets’ first quarter this year. But where’s there life, there’s hope. By the end of April’s first week, there were a few signs those times may be in the rear-view mirror.
By now the whole world knows a Chinese IPO plans to make its debut in the U.S. capital markets this week. The deal is Changyou.com (NASDAQ: CYOU proposed), a carve-out from Sohu.com (Nasdaq: SOHU) and, if Changyou.com wiggles out the door, it’ll be the second Chinese IPO to see daylight in NYC’s financial district this year.
In tandem with the calendar’s flip to the first day of spring on Friday, March 20th, the outdoor temperatures warmed up a bit and so did the climate on Wall Street.
Some people might remember March 10 as “turnaround Tuesday.” That’s when Citigroup (NYSE: C) (quote) announced it was profitable in the first two months of 2009, other big banks chimed in with similar news, and the stock market surged. The good news on the banking front followed stocks hitting their lowest closes for 2009 on Monday, March 9. By Friday’s closing bell, the popular U.S. stock indexes were up about 9 percent to 11 percent for the week. And on Thursday evening, the IPO market had kicked in with a tiny deal.
March roared into town like a lion. It produced winter’s worst storm as temperatures plunged, the winds blew and snow piled up to over 10 inches. In the meantime, Wall Street was hit with its own version of a winter storm. The major U.S. stock indexes lost 6 percent to 7 percent for the week, while the IPO market stayed in hibernation.
When the IPO market returns, you’ll want to have your ducks lined up to aim at what takes flight. One industrial sector to keep an eye on is education; IPOs from this industry are making the grade. And there’s a couple more in the pipeline that should be bookmarked.