The lackluster IPO market abruptly caught fire when four deals all priced strongly and popped more than 20% in their Thursday trading debuts.
The big kahuna was Realogy (RLGY), which raked in $1.1 billion after pricing its 40 million shares atop their expected range at $27. Realogy is a real estate franchiser that owns the Century 21 brand (which used to trade as part of the Cendant conglomerate), as well as Coldwell Banker and the real-estate arms of Sotheby's and Better Homes & Gardens, among others.
The company is losing money and doesn't have much top-line growth either, but it comes to market amid a strong environment for real estate stocks. The stock rose nearly 27% to 34.20.
Homebuilders were among the worst stock groups Thursday. But real estate website Trulia (TRLA), which came public at $17 in late September, rose 5% to 23.20.
Shutterstock (SSTK) provided more of a growth play for investors. It runs an online marketplace of stock photos and videos and has racked up more than 250 million paid downloads since it launched in 2003. Its offering priced at $17, well above the expected range of $13 to $15, to raise $77 million. It also climbed 27% to 21.66.
A pair of biotechs also priced atop their ranges and did well, surprising in that neither of them has a product out yet. Kythera Pharmaceuticals (KYTH) is making a play on the world's growing obesity problem by working on an injectable drug that dissolves double chins. It probably helps that the product is in a late stage of development, making it likelier to reach the market. It will be marketed by Bayer (OTCPK:BAYRY) if it does. Kythera not only priced high, but also enlarged its share offering by about 10% to 4.4 million, raising $70 million. Its shares climbed 24% to 19.79.
Intercept Pharmaceuticals (ICPT) also has a late-stage candidate in the works, a compound based on human bile acid used to treat cirrhosis and other liver diseases. It has a partner in East Asia, but elsewhere plans to commercialize the drug itself. Intercept also enlarged its offering, and raised a total of $75 million after pricing at $15. The stock had the best first-day pop — 29% to 19.40.
Workday Prices High
The most anticipated tech IPO in months should debut Friday: enterprise software startup Workday, which will trade as WDAY. The IPO priced late Thursday at $28 a share, above expectations.
Workday was co-founded by David Duffield, who lost PeopleSoft to Oracle (ORCL) in a $10.3 billion hostile takeover in 2005.
The human capital management software maker has yet to turn a profit, but is growing rapidly. Workday's cloud-based on-demand model has spurred Oracle, SAP (SAP) and others to step up their HCM offerings.
Oil and gas producers Diamondback Energy (FANG) and Linn (LNCO) also are supposed to launch this week.
No other companies have set terms, though, so the IPO excitement might be short-lived.