The IPO Buzz: A Summer Myth

From 1970 through 2006, the months of June, July and August produced 3,372 IPOs, according to U.S. Securities and Exchange Commission filings. That amounted to 27.6 percent of 12,216 IPOs priced from January 1970 through December 2006.
An average three-month period for a 12-month year works out to be 25 percent.
Conclusion: Over the last 37 years, the summer months run 10 percent higher than “average.” There are no “summer doldrums.”
Here is where people might get confused.
The IPO Express hits a speed bump in July and closes down completely by mid-August.
{mosgoogle}A Star-Spangled Break
The Fourth of July holiday tends to slow down the IPO traffic, as any holiday break does. Last week’s four-day week –- shortened by Memorial Day — was a case in point. Bankers got four deals out the door last week. But they priced a total of 31 IPOs for all of May.
The pre-Labor Day through post-Labor Day break in the IPO market has been traditional for decades. By mid-August, all the IPO players -– bankers and clients -– take the balance of the summer off. They hide out in the Hamptons, work on their tans in Tahiti or head for some other glamorous getaway as summer winds down. It takes about two weeks after the Labor Day break for the IPO production line to start cranking out deals.
Jumping into June
Now let’s turn back to June and its full IPO calendar. As one veteran syndicate manager commented, “If there’s a summer doldrums, why can’t I take a vacation?”
Last week’s IPO traffic underscored an old trend and, possibly, a new one in the IPO market. Biopharmaceuticals continue to be “out” and, with the rumbles in the Chinese stock market, maybe their IPOs are falling from favor, too.
(For IPO SCOOP premium subscribers and newsletter subscribers, please check “Last Week’s IPO Traffic.”)
June’s first week gets off to a good start. Bankers are planning to price eight deals that are expected to raise $1 billion. Once again, that’s above average.
From Jan. 1st through May 31st, bankers have priced 108 IPOs that raised $20.1 billion. That makes this year’s average weekly traffic five deals raising $913.6 million.
Note: No “summer doldrums” there.
Heading this week’s IPO traffic are a couple of technology deals (premium subscribers please check “IPO SCOOP Rated Calendar” and “IPO Pipeline with SCOOP Ratings” to see how the IPO handicappers rate each deal.)
However, this week’s calendar doesn’t come without a little confusion. It is the Einstein Noah Restaurant Group (NASDAQ: BAGL proposed or NWRG.PK) deal.
The Colorado-based company owns, operates, franchises and licenses about 600 bagel specialty restaurants in the United States and the District of Columbia. They operate under the names of Einstein Bros. Bagels, Noah’s New York Bagels and Manhattan Bagel brands.
The deal is being carried by its joint-lead managers as an “IPO” and is expected to be priced Thursday evening. Beforehand, you can buy all the stock you wish on the Pink Sheets. It closed at $19.25 per share on Friday, June 1st.
For subscribers: Please check the IPO SCOOP Rated Calendar for the latest Street Consensus of Opening Premium ratings, and be on the outlook for IPO Alert e-mails notifying you of any changes in those SCOOP ratings.
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