IPOs Heat Up From Slow Spring Start --- Market Is Revived, But Legs Are Shaky
The market for newly public companies is off the critical list, but it isn't exactly ready to run a marathon.</br></br>Earlier this spring, the market for initial public offerings was virtually on life support. April was the slowest month for newly public companies since January 1995: Only 30 new companies issued stock to the public, raising $1.6 billion, according to Securities Data Co.</br></br>By contrast, October, the busiest month in recent history, saw 105 companies raise $6.2 billion in initial offerings. Scores of issues that had been expected to price in April or May were postponed, either officially or unofficially, as underwriters hunkered down to wait until small-stock investors' eroding portfolios turned up and they were willing to look at new deals again.</br></br>That moment seemed to have finally arrived when the small-cap market started to heat up at the tail end of April and investors made headlines again on some hot deals. Now many underwriting firms have bulging pipelines, the result of months of prospecting for IPO candidates rather than executing deals. Securities Data reports that there are 184 deals awaiting execution, for $6.5 billion, a significant increase over earlier in the quarter.</br></br>But the enthusiasm may be premature. Unlike previous IPO rallies, many of the most talked-about recent deals have been the larger names, such as Hertz, the car-rental spinoff of Ford Motor. Hertz was priced in late April at $24 a share and closed Friday at $34 on the New York Stock Exchange.