IPOs Thrive after Long Hiatus

Wyatt Investment Research

After more than a month of silence, the U.S. IPO market is suddenly alive and well.

Four IPOs debuted this week, ending a drought in initial public offerings that had lasted since Facebook’s failed May 18 IPO – the eighth-longest dry spell for the IPO market since 2001. None of the new stocks carried nearly the same fanfare as Facebook (FB) did.

The biggest of the bunch sold just 12.5 million shares – not even a blip on the radar screen when compared to the 421 million shares Facebook sold in its IPO.

But the mere fact that five companies were willing to go public is an encouraging sign for the dormant IPO market post-Facebook.

What’s more encouraging is that all five IPOs have performed well in the short time they’ve been publicly traded companies. Here’s how they’ve fared so far (in chronological order):

  • EQT Midstream Partners (EQM): The first IPO since Facebook priced at $21 a share and has since risen exactly $3, or roughly 14%. That’s impressive considering that the stock priced at the high end of its range. The partnership is a spin-off of EQT Corporation, a Pittsburgh-based natural gas transportation and storage company.
  • Tesaro (TSRO): This chemotherapy drug developer had a solid performance since yesterday’s IPO, gaining 2.5%
  • Exa Corporation (EXA): Exa had a nice debut, gaining 7.5% from its $10 IPO price. The Massachusetts-based company provides software solutions for car manufacturers.
  •   ServiceNow (NOW): By far the most successful IPO of the week. The stock debuted today and gained nearly 35% despite pricing above its anticipated range, at $18 per share. ServiceNow is an on-demand software platform that raised $210 million in its initial offering. 


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