Once upon a time, there was a race track in lower Manhattan. It was called IPO Downs. The betting was fast and furious and when bettors didn’t know the horse, they’d bet on the jockey. Things haven’t changed much over the years.
When Father Time closed the door on 2006, the numbers for the year’s IPO market were similar to 2005’s. At the Labor Day break, that didn’t seem possible. On Sept. 1, the year’s IPO traffic was well behind a year ago.
Last week’s IPO market left a few footprints in the sand and a few broken records.
The IPO juggernaut just keeps rolling through December. Eighteen deals were priced last week, and bankers plan to price another 11 deals this week. This surge puts 2006 on course to surpass last year’s IPO traffic.
A handful of IPOs exploded in Friday’s market much like an eruption from a smoldering volcano. They scored an average opening-day gain of nearly 40 percent. But the event that led up to Friday’s fireworks didn’t just happen overnight.
Wall Street is getting ready for its own holiday rush, with the IPO calendar pointing to one of the busiest Decembers in five years.
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.