TransDigm Group (NYSE: TDG proposed), an Ohio-based designer of aircraft components, is the only offering with a pricing date. The other three are listed as “late week.” Stock market conditions and time will tell how the week of March 13, 2006, will come down.
Nevertheless, if you think March 2006 is slow, you’re right. However, if you look back over the past couple of years, then this year’s
IPO traffic, or lack of traffic, is normal. Take a look at the last three first quarters:
- 2005’s first quarter: 47 IPOs priced. Seven were priced in March, down from 30 in February.
By the time 2005 ended, bankers had priced 202 IPOs, excluding 32 unit offerings consisting of common stock and warrants. On December 30, 2005, the scorecard showed 121 IPOs closed 2005 above their initial offering prices, 80 closed below their initial offering prices and one was unchanged. The average gain was 20.7 percent. The Nasdaq Composite Index gained 1.4 percent for 2005.
- 2004’s first quarter: 42 IPOs priced. Seventeen were priced in March, down from 20 in February.
By the time 2004 ended, bankers had priced 233 IPOs, excluding 15 unit offerings. On December 31, 2004, the scorecard showed 187 IPOs closed 2004 above their initial offering prices, 42 closed below their initial offering prices and four were unchanged. The average gain was 35.6 percent. The Nasdaq Composite Index gained 8.6 percent for 2004.
- 2003’s first quarter: Five IPOs were priced. One IPO was priced in March, down from four in February.
By the time 2003 ended, bankers had priced 82 IPOs, excluding two unit offerings. On December 31, 2003, the scorecard showed 65 IPOs closed 2003 above their initial offering prices, 15 closed below their initial offering prices and two were unchanged. The average gain was 26.6 percent. The Nasdaq Composite Index gained 50 percent for 2003.
What the recent past tells us is that the IPO market runs slow in March, but picks up for the rest of the year.
Also, the aftermarket performances by IPOs over the last three years are worth noting.
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