The IPO Buzz: Behind The Headlines

Over the weekend, a New York City radio station broadcast that stocks are in a bear market, “according to analysts.” They got it wrong.

A bear market happens when the market sells off 20 percent or more from its previous high. A correction happens when the market sells off 10 percent or more from its previous high.

Let’s check the numbers.

The Dow Jones Industrial Average closed Friday, Jan. 15, 2016, at 15,988.08, DOWN 12.7 percent from 18,312.39, its previous closing high set on May 19, 2015. You might want to bookmark the following: 14,649.60 is a 20 percent selloff for the Dow.

The S&P 500 Index closed Friday at 1,880.33, DOWN 11.8 percent from 2,130.82, its previous closing high set on May 21, 2015. And bookmark: 1,704.26 is a 20 percent selloff for the S&P.

The NASDAQ Composite Index closed Friday at 4,488.42, DOWN 14 percent from 5,218.86, its previous high on July 20, 2015. And bookmark: 4,172.69 is a 20 percent selloff for the NASDAQ.

In the greater NYC area, the definition of an “analyst” or an “expert” is any stranger on a commuter train or subway.

Nevertheless, when the U.S. stock market sells off, the IPO calendar will dry up. After all, if investment advisors can’t make money on the blue chips in a down market, how can they justify buying IPOs and their unseasoned stocks? In the end, nothing lasts forever: Good markets come and go. Bad markets come and go.

Sub-Prime Credit And Public Works

Back to the present: We do have an IPO calendar and there is a lot behind it. This week lists two deals expecting to raise $150.6 million. One is a new face and the other is a carryover from last week.

Elevate Credit (ELVT – proposed) is a Fort Worth, Texas-based sub-prime provider of online credit to those who are “not well-served by banks and other non-prime lenders.” Elevate offers its services in the U.S. and the U.K. For the nine months ended Sept. 30, 2015, Elevate reported a net loss of $20.2 million on revenues of $300.3 million versus a net loss of $43.8 million on revenues of $179.7 million for the same period a year ago.

(For more information, please click here: Elevate Credit)

Shimmick Construction (SCCI – proposed) is an Oakland, California-based heavy civil construction company offering general construction, construction management and design-build services to federal, state and local public agencies and private customers in California and the Western United States.

(For more information, please click here: Shimmick Construction)

A Promising Pipeline

Looking into next week, starting Jan. 25, and, yes, Virginia, there is an IPO calendar. At press time, there are three deals expecting to raise about $150 million, but there are many more behind them.

The IPO pipeline has about 140 companies that have already filed plans to go public. They hope to raise over $20.7 billion – and there is more.

It has been reported that there are about 154 unicorns, which ae privately owned companies with valuations of $1 billion and more – with an estimated total value of $525 billion. That’s a lot of money. All are waiting for the IPO window to open.

For now, the IPO calendar may be quiet due to market conditions, but markets conditions do change.

Stay tuned.

Discloure: Neither the author nor anyone else on the staff has a position in any stocks mentioned, nor do we trade or invest in IPOs. The author and staff do not issue advice, recommendations or opinions.