IPO Outlook: Many of August's IPOs Rebound to Shine
NEW YORK -- The aftermarket has been kind to many of August's underachieving new issues.</br></br>Most of the companies that foundered when they launched their initial public offerings last month have found new life and many market watchers are pointing to this trend as a sign that, when the IPO market returns from its traditional summer slowdown this week, momentum is on its side.</br></br>"We've gotten a little bit of a reprieve from the selloff in August," said Kathy Smith, portfolio manager at Renaissance Capital's IPO Plus Aftermarket Fund in Greenwich, Conn. "Investors are still jittery, but they're definitely feeling better about the near term, and that's so important for the small-cap growth sector."</br></br>This shift in sentiment is seen most clearly in many of the Internet IPOs that had struggled for most of August. Online recruitment company HotJobs.com Inc., for instance, sold 3 million shares at $8 each-below price estimates of $9 to $11and closed at $8 in its first day of trading on Aug. 10, according to Thomson Financial Securities Data. The company's shares, though, closed Friday at $26.25 on the Nasdaq Stock Market. Mortgage.com Inc. closed below its $8 offering price when it debuted Aug. 11, but now trades at $16.125 on the Nasdaq Stock Market.</br></br>Even those companies that saw just modest gains in their opening days have had big increases. Homestore.com Inc. closed at $22.75 Aug. 4 after pricing 7 million shares, then barely broke 23 after its first week. The shares closed Friday at $49.50 on the Nasdaq Stock Market. Likewise, Netscout Systems Inc. closed at $13.875, a healthy premium over its $11 offering price, when it debuted Aug. 12. But now the shares stand at $26.625 on the Nasdaq Stock Market.