Normally, the IPO calendar starts coming to life about six weeks after the stock market comes off its lows.
But before we get to that, let’s clarify which yardstick is used to measure the stock market. For IPOs, the focus is on the Nasdaq Composite Index — the barometer of the IPO market. Here are the reasons why:
- The listing requirements of the Nasdaq Global Market are not as stringent as the New York Stock Exchange.
- Many of its listings are technology companies (much like the IPO calendar) and
- About 75 percent of the IPOs get listed on Nasdaq.
Reviewing the Situation
Let’s step back in time for a moment. The previous stock market pullback was last summer.
On Aug. 28, 2007, the Nasdaq Composite closed at 2,500.64, DOWN 8.1 percent from 2,720.04, its previous high set on July 18. August 2007’s IPO calendar produced 16 deals, according to the Securities and Exchange Commission filings. Six weeks later, the October IPO calendar produced 33 deals.
Rewind now to April 28, 2005. The Nasdaq Composite closed at 1,904.18, DOWN 11.5 percent from 2,152.15, its previous high set on Jan. 3, 2005. April 2005’s IPO calendar produced 10 deals. Six week later, June 2005’s IPO calendar produced 28 deals.
Let’s take a quantum leap back to 1998.
On Oct. 8, 1998, the Nasdaq Composite closed at 1,419.12, DOWN 29.5 percent from 2,014.25, its previous high set on July 20, 1998. October 1998’s IPO calendar produced five deals. Five weeks later, on November 11, the IPO calendar exploded into history. It produced the likes of EarthWeb (popping for an opening-day gain of 247.8 percent), theglobe.com (rocketing skyward for an opening-day gain of 605.6 percent) and a supporting cast such as Fox Entertainment (which raised $2.8 billion).
Back to the Future
Now back to the present and what we are looking at:
On Jan. 22, 2008, the Nasdaq Composite closed at 2,292.27, DOWN 19.8 percent from 2.859.12, its previous high set on Oct. 31, 2007. January 2008’s IPO calendar produced 12 deals (seven “blank check” offerings.) Ten days later, on Feb 2, the Nasdaq closed at 2,326.20, UP 5.3 percent from its recent low. And February’s IPO calendar is starting to fill up.
There are four deals on February’s calendar, which isn’t much to crow about. But that’s an improvement from one deal at this time a week ago. So there’s something to look forward to.
As of Friday’s close, the IPO pipeline had about 125 companies that had filed plans to go public over the last six months. They were looking to raise nearly $34 billion. That’s not too shabby for a stock market that is coming off a 19.8 percent pullback.
Now here’s where it gets mouthwatering.
There are some big names in the pipeline that have not set proposed pricing terms, so they are not on the calendar. One can only guess they are waiting to post Q4 and year-end results before setting pricing terms and moving onto the calendar.
Here are a few to watch, according to IPO professionals:
BlueArc, a San Jose, California-based provider of provider of high-performance unified network storage systems, filed to raise $103.5 million – no ticker symbol, no pricing terms and no pricing date.
Fabrinet (NYSE: FN proposed), a Cayman Islands-based provider of foundry services to optical component, module and subsystem, filed to raise $250 million -– no pricing terms and no pricing date.
INFONXX, a New York City-based provider of directory assistance services in Europe and outsourced directory assistance services in the United States, filed to raise $250 million -– no ticker symbol, no pricing terms and no pricing date.
LogMeIn (Nasdaq: LOGM proposed), a Woburn, Massachusetts-based provider of on-demand, remote-connectivity solutions to small and medium-sized businesses, filed to raise $86.3 million –- no pricing terms and no pricing date.
And let’s not forget:
Visa (NYSE: V proposed), a San Francisco-based consumer credit, debit, prepaid and commercial payments provider, filed to raise $10 billion – no pricing terms and no pricing date.
What isn’t known are the number and the quality of those deals sitting in the wings. So stay tuned for coming attractions.