The July 4th week is traditionally vacation time in Wall Street’s underwriting world, but not this year. This week has six IPOs. Nevertheless, most of the Street will still be out of town. It seems there is only one new face on the calendar. The other five offerings are carryovers from last week. The IPO traffic will close down by mid-week.
June is busting out all over the IPO world. Eleven IPOs were priced last week, bringing June’s total to 20, and this week’s calendar has another 17 deals on the launching pad. The last time there was more action in June came during the insanity-dot-com Internet bubble of 2000 when 39 IPOs were priced, according to the U.S. Securities and Exchange Commission filings. The reason for the surging IPO market in June 2014 is simple. It’s the stock market.
This week’s IPO calendar features 14 deals looking to raise over $3 billion. This is the second week in 2014 so far to boast 14 IPOs on the calendar. The pharmaceuticals industry, a lagging IPO sector, rules this week’s calendar with eight IPOs. Next up: Energy, a hot IPO industry, accounts for three IPOs. The sizzle, though, comes from swinging London town: Markit, a financial services information provider, is reportedly on the “most wanted” list.
This week’s IPO Express is pulling into the Wall Street Station on schedule. Over the past several years, the calendar has gone into a closed-down phase during the Memorial Day week and it has kicked back into gear by mid-June – just like the present.
The merry month of June rolls into Wall Street this week and ushers in what some call “the summer doldrums,” but that ain’t necessarily so. Although only one IPO is on this week’s horizon, that’s not a downbeat sign in today’s market. Dating back to 1970, the average IPO traffic of June, July and August amounts to 27.2 percent of the annual IPO volume. Note: A three-month period amounts to 25 percent.
On Memorial Day, Old Mother Hubbard went to the IPO cupboard to give investors a bone. When she got there, the cupboard was bare, so investors got none. Not to worry: This is a seasonal factor in today’s IPO market. It’s Wall Street’s version of that classic Coca-Cola ad slogan. Think of it as “the pause that refreshes.”
This week’s calendar totals eight IPOs that aim to raise $2.85 billion. Their expected trading dates follow the fast-track timetable of the 2014 new-issues calendar. The scenario covers 10 trading days. Most companies file their proposed pricing terms on a Monday morning and land on the calendar to trade the following week on Thursday or Friday.
The Chinese are coming, the Chinese are coming was the buzz in Wall Street’s IPO market last week. Alibaba filed its long awaited and highly anticipated billion-dollar initial public offering last Tuesday. Two more Chinese IPOs were priced during the week, raising the total so far this year to seven in the U.S. capital markets.
Over the last few weeks, it’s been a rough trip through the IPO briar patch. But things are looking up, IPO professionals say.
The best thing that can be said for today’s stock market is that it is in a consolidation phase. It’s not in a correction. And it’s certainly not in a bear market. Any way you look at it, this is not a breeding ground for an IPO market.