It had fallen 14.8 percent from 2,370.88, the year’s closing high set on April 19.
The July 21st low also the lowest close in 14 months, when the Nasdaq ended on May 17, 2005, at 2,004.15.
Why is July 21 significant?
In past years, it has taken about six to eight weeks for the IPO calendar to start generating deals after the Nasdaq Composite hits a low.
Should the Nasdaq Composite hold above its recent low, then the six to eight-week time span falls in mid-September.
Mid-September is also a significant period for the IPO market. That’s when it awakens from its mid-August to mid-September Labor Day break. The following is a summary of when the IPO production line started turning out deals after Labor Day in the recent past:
September 19, 2005 was the first post-Labor Day IPO:
Williams Scotsman International (Nasdaq: WLSC), a Baltimore-based provider of mobile and modular space solutions, priced its IPO of 15.3 million shares at $16 each. On Aug. 25, Williams Scotsman closed at $20.06, UP 25.4 percent from its initial offering price.
September 14, 2004 was the first post-Labor Day IPO:
StoneMor Partners L.P. (Nasdaq: STON), a Bristol, Pennsylvania- based operator of cemeteries and funeral homes, priced its IPO of 3.7 million common units at $20.50 each. On Aug. 25, StoneMor closed at $20.75, UP 1.2 percent from its initial offering price.
September 17 2003, was the first post-Labor Day IPO:
National Financial Partners (NYSE: NFP), a New York City-based financial services firm, priced its IPO of 9.1 million common units at $23 each. On Aug. 25, National Financial closed at $36.73, UP 59.7 percent from its initial offering price.
The IPO Backlog
The names that appear on the IPO calendar come from the IPO pipeline, which is made up of the deals in registration. On Aug. 25, the pipeline was larger than at any other time during 2006.
On Aug. 25, 173 companies were in registration to price their IPOs, according to available reports. They are looking to raise $28.6 billion.
On Dec. 31, 2005, 135 companies were in registration to price their IPOs. They were looking to raise $22.9 billion
And from Jan. 1 through Aug. 25, 2006, 132 companies did price their IPOs. They raised $25.2 billion.
So here’s what we’ve got:
The Nasdaq Composite Index is coming off its recent low.
The six to eight-week time lapse between a stock market low and the revival of the IPO calendar falls in mid-September.
Put it another way: The seasonal slowdown of the IPO market comes to an end in mid-September.
The IPO pipeline is larger now than at any other time this year.
There’s an added bonus for subscribers.
There are about a dozen IPOs in the pipeline that the general consensus of IPO professionals has given a 3-Star SCOOP Rating.
Note: A SCOOP Rating stands for Street Consensus Of Opening Premiums — a general CONSENSUS of how an IPO might trade in the aftermarket.
The SCOOP Ratings are subject to change. Subscribers will be notified by e-mail when this happens.
Subscribers can check: The “IPO Pipeline and SCOOP Ratings,” sorted by lead manager, to learn what’s hot and what isn’t in today’s IPO market.