The IPO Buzz: Aesop 2.0

 
Among the best-performing “hares” were foreign IPOs that were priced and traded in the U.S. stock market.
 
By Friday’s close, Dec. 28, the top three winners were JA Solar Holdings (Nasdaq: JASO), a Chinese solar energy producer, which closed UP 360 percent from its initial offering price; MercadoLibre (Nasdaq: MELI), a Buenos Aires-based company that hosts an online trading platform for e-commerce in Latin America, dubbed by some as “Latin America’s eBay,” UP 337.8 percent, and Yingli Green Energy Holding (NYSE: YGE), a Chinese producer of photovoltaic products, UP 249 percent.
 
In 2007, Wall Street’s investment bankers priced 277 IPOs, according to U.S. Securities and Exchange Commission filings. That figure excludes bank conversions, closed-end funds, “best effort” offerings and foreign companies offering American Depositary Shares in the U.S. stock market while their shares have been listed on their own national stock exchanges. (Those deals are secondary offerings.)
 
The 277 IPOs of 2007 raised $58.9 billion. That was a sharp improvement over the past few years. Consider the following:
  • In 2006, bankers priced 240 IPOs. They raised $45.8 billion.
  • In 2005, bankers priced 236 IPOs. They raised $37.0 billion.
  • In 2004, bankers priced 248 IPOs. They raised $45.6 billion.
Time Is On the Tortoise’s Side
Now for the newsflash that must have Aesop smiling from the great beyond. The busiest sector in 2007 came from pricing the “blank check” companies — the year’s tortoises.
 
In 2007, bankers priced 63 “blank check” companies. They raised $10.6 billion. That was a sharp improvement over the past few years. Consider these numbers:
  • In 2006, bankers priced 43 “blank check” companies. They raised $3.1 billion.
  • In 2005, bankers priced 29 “blank check” companies. They raised $1.98 billion.
  • In 2004, bankers priced 4 “blank check” companies. They raised $237 million.
  • In 2003, bankers priced no “blank check” companies.
To go from zero dollars to almost $11 billion in a five-year period is no small feat. The “blank check” deals may not be sexy, but they’ve earned a spot in the IPO pantheon.
 
Now, here’s a clue as to what to look for in 2008: more “blank check” offerings.
 
On Dec. 28, the IPO pipeline showed 49 “blank check” companies in registration. They aim to raise $8.4 billion.
 
In the final week of 2007, bankers filed plans to price another eight “blank check” companies. They hope to raise $2.6 billion.
 
That’s Wall Street for you. They always back the winners.