It may have rained on Macy’s Thanksgiving Day parade, but the sun was shining on the IPO parade at the corner of Broad and Wall Streets.
The much heralded NYMEX Holdings (NYSE: NMX) IPO popped with an opening-day gain of 125.4 percent last Friday. Given the background of the IPO market over the last six months, moonshots over Manhattan have not been isolated happenings.
All you had to do was to look at the cover. We’re talking about the cover page of the prospectus for each of Friday’s four IPOs. Two went splat and two popped in the aftermarket.
This fall’s high-flying IPO market lost altitude last week and hit the runway without all its landing gear in place. By Friday’s close, three of six deals finished below their initial offering prices and the average aftermarket performance for all six was a minus 0.21 percent.
What do you get when you see an opening-day gain from a $20 billion IPO of 15 percent, a REIT popping for 13 percent and a deal from a troubled industrial sector gaining 18 percent? Maybe an IPO frenzy?
Bull markets are more fun.
In case you hadn’t noticed, the running of the IPO bulls started in mid-September. And this week looks to produce the biggest new-issues calendar since January.
On Friday morning, Mr. John Coustas, president and CEO of the Greek shipping company Danaos, stepped onto the balcony of the New York Stock Exchange to ring the opening bell. It was to launch the listing of his company’s IPO. The stock opened flat. It sank in the aftermarket.
September 2006’s IPO market closed on an upbeat note. Wall Street bankers priced three deals for Friday’s trading, seven for the week and 15 for the month, according to available reports.
If you don’t know the horse, bet the jockey. That advice has floated around the race tracks for decades. The same could be said for Wall Street, its IPO stable and its investment bankers.