The IPO Buzz: Champagne, But No IPO Bubble

Let’s Take a Look at 2004
The calendar produced 233 IPOs that raised $45.1 billion, according to the U.S. Securities and Exchange Commission filings. (Note: These numbers excluded unit offerings consisting of common stock and warrants, closed-end investment companies, best effort offerings and foreign companies offering American Depositary Shares representing stock already being traded on their own national stock exchanges.)
Let’s Take a Look at 2013
The calendar produced 218 IPOs that raised $52.7 billion. That made this year’s traffic well below – yes, well below – the 1980-2013 annual average. Over the last 34 years, 12,016 IPOs were priced. That makes 353 IPOs an “average” year. This year’s traffic was 38.2 percent BELOW average.
Conclusion: No large traffic. No IPO bubble in 2013.
Next: The opening-day performance for all 218 IPOs this year was 149 winners, 55 losers, 14 unchanged, and the average gain was 18.86 percent.
Consider this: In 1999, the average opening-day gain was 78.1 percent for 531 IPOs that came to market. In 2000, the average opening-day gain was 69 percent for 422 IPOs that came to market.
Conclusion: No huge opening-day gains. No IPO bubble in 2013.
Another Sign of “No IPO Bubble”
Today’s IPO aftermarket has not run wild in outperforming the underlying U.S. stock market. On Dec. 27, 2013, the IPO scorecard showed 172 winners, 46 losers, and the average gain for all 218 IPOs was 40.3 percent. That was slightly better than the NASDAQ Composite Index. It was up 37.8 percent year-to-date.
Conclusion: No runaway aftermarket. No IPO bubble in 2013.
Now on to the future: In past years, you could expect the IPO market to start coming to life in mid-January. But the JOBs Act has changed things. The calendar could come to life sooner rather than later.
The staff of would like to wish everybody “Happy New Year!”
Stay tuned. 
Disclosure: 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.