The returns of recent IPOs have turned in mixed results to date.
In last week's
we looked at the difference in returns between the offering price
and the open price on the first day of trading. Today we'll take a
look at returns to date, plus new companies set to hit the major
exchanges this week.
There is lots to cover so let's get started.
From now on I'll use the 1
day open price to calculate an IPO stock's return. More often than
not, it will be difficult to get shares at or close to the offering
price on the IPO date (the price institutional clients get) - so
you'll end up purchasing shares at the market price.
I want to show you three returns for each stock: (1) the return
since IPO through last Monday (in blue); (2) the return since IPO
date through yesterday (in red); (3) and last week's return (the
difference between the two returns).
For example, as of last Monday
Qlik Technologies (Nasdaq: QLIK)
had a return-to-date of 15.2 percent and as of yesterday's close
had a return of 23.2 percent. So it gained 8 percentage points last
week - not bad for one week. But not all have done as well. Take a
look for yourself.
Tesla Motors (Nasdaq: TSLA)
has leveled out with around a 10 percent gain, whereas
Smart Technologies (Nasdaq:
is falling behind with every passing day - last week alone it lost
has also faltered, and had it not been for a superb gain of 7
percent yesterday, the stock's losses would have been similar to
those for Smart Technologies.
Green Dot (
is essentially flat since going public.
***Three more companies hit the major exchanges last week -
let's see how they've done so far.
Natural gas gatherer
Chesapeake Midstream Partners (
sold 21.3 million shares to the public at $21 a share - at the high
end of its pricing range - raising $446 million in the offering.
The stock closed yesterday at $23.08, 3.7 percent higher than its
first day open price of $22.40 a share.
Web-based investment-services provider
is up 12.3 percent since going public last Thursday. The company
priced shares at $9 a share, after lowering its original price
range from $12 to $14 per share to $9 to $10 per share.
, which specializes in rare-earth metals, also reduced the size of
its offer after underwriters struggled to find enough buyers for
the $15 to $17 a share price range. The company sold 28.13 million
shares at $14 per share, but has dipped to $13.30 as of yesterday's
The chart below shows the returns of these three stocks since
going public (calculated from the open price on first day of
***Two others companies were scheduled to go public last week
but their offerings were postponed.
SurgiVision Inc. (
, a developer of medical equipment and software, postponed the
offering after reducing its size by roughly 40 percent, according
Trius Therapeutics (Nasdaq: TSRX)
slashed its expected price on shares yesterday, after the company
struggled to go public last week. With little interest in the
offering, the company cut down its size to 6 million shares from 10
million shares. The company also reduced the price to $5, after it
originally hoped to raise $12 to $14 a share. Using the middle of
this range, Trius's proceeds from the IPO will decrease 36
There are six other companies expected to go public this week
including pharmaceutical company
Ambow Education Holding (
- a company that provides education and test preparation services
D. Medical (
, which develops and manufactures insulin pumps, is the smallest of
the offerings with expected proceeds around $30 million.
Gordman Stores (Nasdaq: GMAN)
is a low-price fashion retailer that has 68 stores in the Midwest.
The company expects to raise $75 million in the offering, selling
5.4 million shares at a price range of $13 to $15 a share.
IntraLinks Holdings (
specializes in online document management security and has over
4,300 customers. The company expects to raise $165 million by
offering 11 million shares to the public at a price range of $14 to
$16 per share.
Diversified global semiconductor
NXP Semiconductors (
is expected to be the biggest offering this week, with the company
offering 34 million shares at $18 to $21 per share.
***Many of these companies are testing the IPO market as it
continues to improve since last year. By the end of the first two
quarters this year, there were 37 effective IPOs, up significantly
from last year's 10.
Jackie Kelley of professional services firm Ernst & Young
Small Companies found in all industries are gaining confidence
that they can succeed in the capital markets and are ready to
deliver on their promises
But just because more companies are going public does not mean
they're all good investments. Be sure to look into these IPOs
closely, examine the prospectus, and decide if they're right for
I'll continue to update you to current developments in the IPO
market in next week's IPO Update.