The buildup of the calendar was fast and sharp.
Consider the following: On Friday, Dec. 1, bankers had six deals on the IPO calendar for the week of Dec. 4, and another 14 deals for the week of Dec. 11, 2006.
In addition, bankers had another 14 deals in the IPO pipeline, with proposed pricing terms, waiting to move onto the IPO calendar with offering dates.
A Look Back – and Ahead
What a difference a week makes. On Friday, Nov. 24, which happened to be the day after Thanksgiving, the IPO calendar told a different story. Bankers had four deals on the IPO calendar for the week of Dec. 4 and nothing behind it. It was clean and green, looking beyond December’s first week.
That’s right. The IPO market was cruising out of the Thanksgiving week with only four IPOs set to make their debuts in December.
However, there were another 15 deals in the IPO pipeline with proposed pricing terms, waiting to move onto the new-issues calendar with an offering date.
Last week’s sharp increase in the IPO calendar flashed a signal that bankers will be busy pricing deals into mid-December.
Between what is on the calendar with pricing dates and what is waiting in the wings, December 2006’s IPO traffic could very well challenge December 2004’s 33 offerings.
But there was a little more to last week’s traffic than an increasingly crowded calendar. Only three deals were priced, but that’s normal coming off the Thanksgiving holiday break. Consider the following:
- In 2003, three IPOs were priced, with an average opening-day gain of 4 percent.
- In 2004, one IPO was priced, with an opening-day gain of 3.64 percent.
- In 2005, two IPOs were priced, with an average opening-day gain of 5.25 percent.
- In 2006, three IPOs were priced, with an average opening-day gain of 15.8 percent.
Wait a minute. An average opening-day gain of 15.8 percent?
There’s a message there. The IPO market might be stronger than people think. By Friday’s close, last week’s graduating class had an average gain of 23.9 percent above their initial offering prices.
And this was against a declining stock market.
The Nasdaq Composite Index closed Friday at 2,213.21, down 1.9 percent from the previous Friday.
The Winner’s Circle:
— Wireless Ronin Technologies (Nasdaq: RNIN),a Minnesota-based software provider delivering systems that manage, schedule and deliver digital content over wireless or wired networks, priced 4.5 million shares at $4 each on Monday, Nov. 27. The IPO closed its opening day at $4.58 and on Friday at $5.74, up $1.74 per share or up 43.5 percent above its initial offering price.
— Grupo Aeroportuario del Centro Norte or Central North Airport Group (Nasdaq: OMAB), a Mexican operator of 13 airports, priced 20.9 million American Depositary Shares (ADS) at $18 each on Tuesday, Nov. 28. That was above its filing range of $14.50 to $15.50 ADS. The IPO closed its opening day at $20.85 and on Friday at $22.20, up $4.20 per ADS or up 23.3 percent above its initial offering price.
— Netlist (Nasdaq: NLST), a California-based manufacturer of high-performance memory subsystems, priced 6.25 million shares at $7 each on Tuesday. That was on the low end of its $7- to $9-a-share filing range. The IPO closed its opening day at $8.10 and closed Friday at $8, up $1 per shares or up 14.3 percent above its initial offering price.
If last week was any indication of the underlying strength of newly minted IPOs, December’s new-issue traffic might be worth hanging around for.