The IPO Buzz: Peek into the IPO Bull Pen

These signs may be sending the message that the new-issues market just might be awakening.
Of course nobody really knows, but let’s take a closer look at last week’s IPO traffic. (See Part 2 of the e-mailed newsletter or log in to the Web site.)
Into the Bull Pen
The NASDAQ Composite Index closed on Friday, July 17, at 1,886.61 — UP 19.6 percent for the year. (Hello, Mr. Bull!) At that level, the Nasdaq was also UP 48.7 percent from 1,268.64, its closing low on March 9. A span of nearly five months from recent low to fresh high and the undercurrent of a strong stock market provide the foundation that bankers need to build an IPO calendar.
The Filings
Five companies filed plans to go public last week, according to the SEC’s filing window. The last time this many companies dipped their toes into the IPO pond was for the week ending Aug. 27, 2008. And the last time there were more filings in a single week was for the week ending June 20, 2008, with six companies. But in each case, neither week had the wind of the stock market at its back.
Sign of Things to Come
Specialty finance companies, filing the S-11 papers for real estate investment trusts, have been lining up to buy the toxic assets from banks under the U.S. government’s Public-Private Investment Plan, or PPIP. Four of them filed last week to raise $1.3 billion; another four already filed during July’s first week. Those were looking to raise $2.1 billion.
And one, Invesco Mortgage Capital (NYSE: IVR), has already gone public.
Note: On July 8, the U.S. government selected nine managers to participate in the PPIP program and each has 12 weeks to raise at least $500 million in capital, according to published reports. They were: AllianceBernstein (NYSE: AB); Angelo Gordon; BlackRock (NYSE: BLK); Invesco (NYSE: IVZ); Marathon Asset Management; Oaktree Capital Management; RLJ Western Asset Management; The TCW Group, and Wellington Management.

Rounding out last week’s SEC filing window, one company — CDC Software (NASDAQ: CDCS – proposed), a Chinese software provider -– not only filed to go public, but jumped into the IPO calendar to be priced during the week of Aug. 3. And another -– Cumberland Pharmaceuticals (NASDAQ: CPIX – proposed) -– refiled its proposed offering terms late Friday afternoon. An expected offering date is likely to be announced this week.
If last week was any indication, it seems that the IPO pot was starting to bubble. In the meantime, we wait for the sun to light up the yellow brick road to the Land of IPOs.
When the market conditions are right, then investors will get the nod: Yes, the wizard will see you now.