Initial public offerings are like exercises in bravery, both for investors and the firms. For investors, purchasing IPO shares is like riding a roller coaster. Shares tend to rise and then plummet, repeat, and eventually find some stable pattern that may or may not return the initial investment. Just think of what happened to Facebook (FB).
For the companies preparing to debut on the market, the process is just as nail-biting. Launching a company on the market is no small thing. It takes months, if not years, of research, reporting, reviews, investigations, time and money. So when the IPO finally hits, they hope it will be worth it all.
Sometimes it's not, and it's not always the company's fault. Overall market conditions can have more to do with an IPOs success than the value of the firm.
That alone explains why times of market prosperity see influxes of IPOs, and pullbacks in the market are usually IPO-less. The last few months have been a perfect example. In the months leading up to 2012 the market went several consecutive months without a single IPO. But the start of the new year saw a fantastic market rally, and IPOS were debuting in droves. IPO calendars were filled.
Alas, recent pullbacks in the market have cleared the IPO pipeline once more. As IPO Scoop.com aptly puts it "The IPO market was hit with double whammies that dried up the calendar. But somewhere in time, there is a light at the end of the tunnel."
Indeed, IPOs will one day grace our stock markets again, but for now, don't hold your breath. There are no set dates for any upcoming IPOs, and after the Facebook debacle the drought may run for a while.
Business Section: Investing Ideas
Let's check in on the brave businesses who wisely, or perhaps foolishly, made the IPO leap in the last few months. The average return of the past 20 IPOs to date is 5.4%.
The top performer is Acquity Group Limited (AQ), which has rallied 51.67% to date. A close second is ClearSign (CLIR) at 50.75%. The greatest loser is Edgen Group (EDG), down 27.09%, narrowly beating out Facebook (FB) at -26.74%.
Facebook was the last IPO to debut, all IPOs scheduled to launch after Facebook have withdrawn.
Here's a recap, listed in chronological order:
(Written by Rebecca Lipman. Data sourced from iposcoop.com.)
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- Facebook (FB, Chart, Download SEC Filings)
- Edwards Group Limited (EVAC, Chart, Download SEC Filings)
- Ignite Restaurant Group (IRG, Chart, Download SEC Filings)
- Audience (ADNC, Chart, Download SEC Filings)
- WageWorks (WAGE, Chart, Download SEC Filings)
- Western Asset Mortgage Capital (WMC, Chart, Download SEC Filings)
- PetroLogistics LP (PDH, Chart, Download SEC Filings)
- Tillys (TLYS, Chart, Download SEC Filings)
- Carlyle Group L.P. (CG, Chart, Download SEC Filings)
- EverBank Financial (EVER, Chart, Download SEC Filings)
- Pacific Coast Oil Trust (ROYT, Chart, Download SEC Filings)
- Supernus Pharmaceuticals (SUPN, Chart, Download SEC Filings)
- Acquity Group Limited (AQ, Chart, Download SEC Filings)
- Edgen Group (EDG, Chart, Download SEC Filings)
- Ares Commercial Real Estate (ACRE, Chart, Download SEC Filings)
- ClearSign (CLIR, Chart, Download SEC Filings)
- Envivio (ENVI, Chart, Download SEC Filings)
- Infoblox (BLOX, Chart, Download SEC Filings)
- Midstates Petroleum (MPO, Chart, Download SEC Filings)
- Proofpoint (PFPT, Chart, Download SEC Filings)
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