The IPO Buzz: Whipping up Hope

NIVS IntelliMedical Technologies Group (NYSE-ALT: NIV) (quote), a China-based manufacturer of audio and video consumer products, got its deal out the door.
After being dragged from week to week on the IPO calendar since Jan. 19, NIVS priced 550,000 shares at $3.50 each to raise $1.9 million on Thursday evening. The IPO started trading on Friday at $4.30 per share and closed its opening day at $4.20 — UP 20 percent from its initial offering price.
That brings March 2009’s total IPO traffic to one offering, but it’s not a complete wasteland.  
The slowest March on record since 1970 was 1974 and 1975, when nothing was priced, according to U.S. Securities and Exchange Commission filings.
Turn Back the Clock Six Years
The last time the IPO calendar produced a single deal in March was in 2003, when bankers had to reach across the Atlantic to the Republic of South Africa to find a candidate.
Telkom SA (NYSE: TKG) (quote), a South African-based telecommunications provider, offered 34.8 million American Depositary Shares (ADS) at $13.98 each on March 4, 2003. The deal was priced well below its filing range of $15.30 to $18.70 per ADS and closed its opening day as a broken deal at $13.90.
Now the happy news:  Telkom closed Friday, March 13, 2009, at $40.87 — UP 191.7 percent from its initial offering price.
March 2009, however, could have more in common with March 2003 than just a single IPO getting priced.
On March 11, 2003, all three major U.S. stock market indexes closed at their year’s lows and then staged a powerful rally, finishing 2003 at their respective closing highs for the year.
From March 11 to Dec. 31, 2003, the Dow Jones Industrial Average gained 38.9 percent, the S&P 500 gained 38.9 percent and the Nasdaq Composite Index gained 57.6 percent. And that surge carried into the IPO market.
Three months after March 11, 2003, bankers squeezed another five IPOs into the market –- you could count them on one hand. Then the IPO traffic picked up. By Dec. 31, 2003, the new-issues calendar had turned out 84 deals for the year. And that momentum carried into the following year. In 2004, bankers priced 248 IPOs, which brings us back to the present.
The parallels between 2009 and 2003 are a dead IPO calendar –- just one deal in March and, hopefully, the underlying stock market has hit its lows for the year.
Now we wait.