Into the IPO Ring
Who's Who on the IPO List
Groupon Pops, But Has Plenty to Prove
They’re lined up like airplanes on a runway, at least nine companies getting ready to go public this week—making this potentially the busiest week for initial public offerings since 2007, according to IPO-tracker Renaissance Capital.
The successful Groupon offering earlier this month, a slightly less volatile financial market, and the approach of the holidays all play into the unusually high number of companies planning a public play. The companies planning IPOs this week range from auto parts maker Delphi, to biotech firms working on cancer drugs, to visual effects house Digital Domain Media Group, to the venerable Internet review site Angie’s List. (Click here for details on all the companies with initial public offerings this week.)
So does that mean we’re about to see a real boom in IPOs? Not necessarily. One company that was initially planning on an IPO run this week, China's LaShou Group, postponed those plans. And not everyone’s impressed with either the number or quality of the companies planning to make their market debuts.
“There was a backlog looking for…some stabilization in the market,” said Mark Mihanovic, a Silicon Valley-based attorney with McDermott Will & Emery who advises companies in corporate finance, mergers, and governance. “Windows open and close, particularly in a volatile market and when the windows open you want to go through it.”
Further, he said, it’s not surprising to see a rush to go public the week prior to Thanksgiving, before the distractions of the holidays and planning for 2012 get in full swing.
Tech companies had been debuting at a solid pace through the early part of the year, with firms like LinkedIn and Pandora going public. But summer and early autumn doldrums hit the market as political and macroeconomic concerns like the U.S. debt debate and the fate of the euro introduced more uncertainty into trading.
Still, about 200 companies have filed to go public this year, Horace Nash, a lawyer with Fenwick & West LP said. In terms of actual IPOs executed, Renaissance reports that as of September, 96 companies had followed through.
That's a strong showing compared to the depths of the recession. In 2008, only 36 companies went public. In 2007, the number was 86. That 200-company-long IPO backlog is the largest in more than a decade.
Mike Niland, a partner at PricewaterhouseCoopers, said that full pipeline was cause for optimism that more companies will go public this year, and the next few weeks are likely to be very active.
“Overall we’re positive on the market,” he said. “You’re seeing a lot of companies that are in the pipeline that are really positive.”
For Jeff Sica of Sica Wealth Management in New Jersey, the crop of companies going public is an uninspiring one.
“It’s more of a take the money and run scenario,” he said of the potential IPO glut. “None of the companies are particularly exciting. I think a lot of companies are looking at what happened with Groupon and saying we…have to go public now."
Sica certainly didn't hold back with his feelings: "They’re boring companies ... There’s little excitement about what they do. That doesn’t really bode well in terms of the future of the equity market.”
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