Most of the deals flopped in the aftermarket, more companies cancelled plans to go public and, by Friday’s close, the 2008 IPO Scorecard showed more losers than winners.
Not a pretty picture.
But even a storm cloud can have a silver lining. Last week had a bright spot or two.
Asia Time (AMEX: TYM), a Hong Kong-based distributor of watch movement components, popped for an opening-day gain of 142.9 percent. Bankers priced 838,000 shares at $3.50 each on Tuesday, Feb. 12. The IPO started trading on Tuesday at $7.50 and closed at $8.50 per share.
That was the 243rd IPO to score a moonshot, which is an opening-day gain of 100 percent or better, dating back to Oct. 14, 1980, according to a study by Dr. Jay R. Ritter, Cordell Professor of Finance at the University of Florida. The first moonshot was the original Genentech IPO, which was priced more than 27 years ago –- on Oct. 14, 1980 — at $35 per share. It closed its opening day at $71.25, UP 103.6 percent.
The first Genentech IPO ranks No. 231 on the list of 243 moonshots.
That number may seem like a lot, but it isn’t. Since October 1980, about 11,125 companies have gone public, according to U.S. Securities and Exchange Commission filings. So the IPO moonshots represent only about 2.2 percent of all IPOs in the past 27 years.
To recap, Asia Time leaped into the moonshot club in early 2008 against the backdrop of a winter storm in the U.S. stock market. And to put that achievement in perspective, consider this: There were no moonshots in all of 2007.
The previous moonshot was the Nov. 17, 2006, NYMEX (NYSE: NMX) IPO. Bankers priced 6.5 million shares at $59 each. The IPO opened at $120, sold as high as $150.01 and closed its opening day at $132.99, UP 125.4 percent. NYMEX never sold higher than $150 per share and the IPO took three months to rise above its opening-day close. On Feb. 16, 2007, NYMEX closed at $133.54. A year later, on Friday, Feb. 15, 2008, NYMEX closed at $100.29 per share.
Now back to last week’s IPO traffic.
Bankers priced four deals and three closed the week below their initial offering prices. Seven companies withdrew plans to go public, which raised this year’s withdrawals to 27. But one of last week’s cancellations had been sitting in the IPO pipeline for nearly two years. NewPage Holdings, a Dayton, Ohio-based coated paper manufacturer, was one of the withdrawals. It had filed to go public on April 18, 2006.
Now For Some Good News
Six companies filed plans to go public last week. That raised this year’s total to 37 filings. Among last week’s names were:
Artio Global Investment (NYSE: ART proposed), a New York City-based provider of asset management services to institutional and mutual fund clients, and the parent of Julius Baer Investment Management. It filed for an IPO to raise $1 billion and
IDS Group (Nasdaq: IDSI proposed), a Minneapolis-based financial services management company. It filed for an IPO to raise $86.3 million.
Those names plus the rest of last week’s new filings show about 172 companies in the IPO pipeline. They are expecting to raise $43.7 billion.
(Please check IPOScoop.com’s IPO Pipeline. Subscribers can sort deals by SCOOP ratings – the acronym for (Wall) Street Consensus Of Opening Premiums – by going to the select window, opening the drop down a select “SCOOP ratings desc.”)
Given the choppy stock market, it is not too surprising that there are just two deals on this week’s calendar -– both are special purpose acquisition companies, also known as SPACs or “blank check” deals. But it’s only a four-day work week with the financial markets closed on Monday for Presidents’ Day.