The IPO Buzz: July’s Hidden Strength

The U.S. stock market ended the first week of July with a bang – more than recovering from June’s losses. Here are the numbers:

This brings us to the IPO calendar.

 

It has been well documented that you won’t have an IPO market without a strong stock market. They go hand in hand. And under the JOBS Act, today’s IPO pipeline is primed to deliver.

 

 

A word about the JOBS Act: It was signed into law in April 2012 to facilitate among other things the issuance of IPOs. (JOBS, as you may recall, is an acronym for Jumpstart Our Business Startups.) Of course, it is much more complicated than that. But all we need to know is that the time between when a company files its plans to go public (the S-1 filing in Wall Street jargon); files an amendment (the S-1/A filing) stating the number of shares to be offered and its price range, and then lands on the IPO calendar with a pricing date, can take from a few days up to a few weeks.

 

Pre-JOBS Act, the underwriting process could and did take weeks and even months to run its course for a company to file its S-1 plans, finally get priced and start trading.

 

Let’s turn back to the present.

 

June’s IPO market closed with a rush. Its calendar turned out 11 IPOs during its final week and a moonshot on its final day of the month. That was Noodles & Company (NDLS).

 

Noodles & Company is a Broomfield, Colorado-based operator of a chain of casual restaurants. Its IPO of 5.4 million shares was priced at $18 each on Thursday evening, June 27. The stock opened at $32 on Friday morning, June 28, and closed its opening day at $36.75 – UP 104.2 percent from its initial offering price.

 

And the fun was just beginning.

 

Noodles’ stock sold on Wednesday, July 3, as high as $51.40  before closing on Friday, July 5, at $44.32 – UP 146.2 percent from its initial offering price.

 

With June’s hectic IPO pace, it was easy to overlook the SEC’s IPO filing window. To save everybody the trouble of looking up these numbers, here they are:

 

Since the beginning of June 37 companies filed plans to go public. They were looking to raise about $7.5 billion. By comparison, in June 2012, only nine companies filed plans to go public. They were looking to raise about $3.5 billion.

 

With the JOBS Act in place and the recent surge in filings, it is reasonable to expect busy times in July’s IPO market – depending upon market conditions, of course.

 

 

Stay tuned.