Though Dave & Buster's pulled its planned initial public offering after the close Thursday, and a number of prominent new companies -- namely Facebook (FB) -- have been busts, the overall market for new issues has been fairly upbeat this year.So far in 2012, the U.S. has seen 105 IPOs priced, a count that's ahead of the 96 at the same time last year, according to data from IPO researcher Renaissance Capital. Those initial offerings have raised $36.1 billion, a 23.4% increase from 2011.
In all, 50 IPOs have been called off since the start of the year, but that's right on pace with the prior year. Through the 2011 third quarter, 49 offerings got canceled, data from Greenwich, Conn.-based Renaissance show. Still, the year might exceed the average of the past nine years, when in a typical year just under 55 IPOs were withdrawn. The high was 2008, with 103. Sure, it could be stronger. But on the whole, in terms of the number of offerings getting pulled, there doesn't seem to be a particularly outsized negative trend underway.
Because some of those companies that rethinking their IPO moves are well known, it's tempting to take the view that prospects for new stocks are poor. For instance, before Dave & Buster's stepped back, guitar maker Fender chose not to carry out its IPO, and CKE, the owner of Hardee's and Carl's Jr. restaurants, decided to postpone its own initial sale. BATS tried to get out of the gate, but technical problems derailed the exchange's deal. Not the best of times, but not the entire story, either.
The tech sector has seen the most activity in the IPO market, accounting for 32 offerings that raised $19.3 billion, Renaissance says. Of course, that's also home to some of the more talked-about disappointments of late. Deal site Groupon (GRPN) and game maker Zynga (ZNGA) both actually went public late last year, but they're fresh in the minds of investors, thanks to the fact that they're down 80.5% and 76.1%, respectively, since coming to market. (Zynga, in fact, is getting hammered again Friday.) Facebook, which began trading in May, hasn't been anywhere close to the $45 high the social network reached its first day. In recent trading, it was at $21.40.
Even with the widely known laggards, performance-wise IPOs are on average up about 22% apiece from their pricing, according to Renaissance. However, companies with more shares available for trading by the public haven't fared as well, as reflected in the FTSE Renaissance IPO Composite Index. The index is float-weighted, and it's up 9.9% this year, trailing the S&P 500's 16.7% gain since the close of 2011, Yahoo! Finance data show.
Renaissance ranks clothing designer Michael Kors (KORS) as the best IPO of the past 12 months, rising 167.2%. Mortgage servicing firm Nationstar Mortgage (NSM) is next, with a gain of 152.6%. Both Groupon and Zynga make the list of the five steepest decliners going back a full year, but the worst is production company Digital Domain (DDMGQ), down 93.5% and now in Chapter 11.
It's fair to say the IPO market has clearly had some stocks it would rather forget went out in the past few months, but it's far from a lost year. Like a lot of things, it's usually not as bad as it seems in the off times and not as good as it seems in the booms.
- Stocks & Offerings