The merry month of May produced a record number of IPOs. In June, the talk often turns to the twilight zone of “the summer doldrums.” In past years, though, the summer months have proven to be anything but dull for the IPO market.
The legendary mountain man who roamed the Rocky Mountains in the early to mid-1800s lived by his wits and by reading the signs of nature. The hoot of an owl, the rustle of leaves, the color of the sky all told him something – much like reading the preliminary prospectuses in today’s IPO market. This week’s calendar tells us something.
Financial reporters recently have asked one question so often that it almost sounds like a broken record: “Has the IPO market dried up?” The answer is found in the numbers. By mid-May, this month’s IPO headcount stood at 21 deals. If you add in this week’s traffic, May is on track to be the busiest IPO month in five-and-a-half years.
Investors are hoping for better returns from this week’s IPO calendar than they got from last week’s offerings. What happened was classic Wall Street. Companies raised billions of dollars. Their bankers pocketed millions and investors left with pennies. Before getting into last week, let’s look to the rainbow and this week’s IPO calendar.
This week, Wall Street is expected to produce another billion dollars in IPO offerings. Actually, it is over $2 billion, but here’s a surprise. This year is playing catch-up to last year’s the IPO traffic.
A billion here, a billion there, and pretty soon, there’s serious money involved. This week’s IPO calendar has nine offerings, with bankers expecting to raise more than $2.1 billion. Five IPOs are on for next week, aiming to raise another $1.1 billion.
Last week’s calendar gave us pops, flops and one IPO that traded on both sides of heaven’s gate. The six IPOs raised $1.86 billion. This week, it’s a much different story.
Wall Street is looking to raise almost $2 billion from this week’s IPO calendar. That’s well above the average weekly volume of $725 million over the last 10 years.
IPOs from three sectors – cloud computing, homebuilders and money-transfer companies – have been hot. But on Wall Street, it’s crucial to remember one thing: You are only as good as your last trade. This week’s new-issues calendar has a representative from each of these three sectors. Let’s take a look.