|
IPOs off to slow start
|
 |
January 14, 1997: 2:30 p.m. ET
But the lull won't last. International issues, telecom stocks will lead
From Correspondent John Defterios
|
NEW YORK (CNNfn) - In 1996, a record 874 initial public offerings for $50 billion hit the market, but 1997 is off to a slow start.
Six offerings were delayed last week as companies waited for stock prices to firm.
But analysts predict the pace will pick up. "This is more of a seasonal-type occurrence, and right now, we can look at the pipeline, which is relatively full, and have an idea that there will be … a fair amount of deals coming to the market especially early in February," said Ryan Jacob, research director at IPO Value Monitor.
Nearly 200 deals in the pipeline are expected to raise $5 billion early in the year -- about the same number as this time last year.
Several notables are on tap:
- Alta Vista, an Internet search engine and competitor of Yahoo, is drawing much analyst attention.
- The hot software sector, which saw a 20-percent jump in IPOs in 1996, is poised for a repeat.
- Coldwater Creek Catalogue, a western casual wear retailer, goes public in January.
- Airplane parts manufacturer Doncasters is also waiting in the wings.
In 1996, investors lapped up international IPOs from companies including Russian mobile phone group Vimplecom, which soared 40 percent the day it traded. And Deutsch Telekom's IPO raked in $13.5 billion.
What in many cases drives the international IPOs is that they are a bargain compared to bulked-up U.S. stocks
Price-earnings ratios "are at the top of the range," said Robert Natale, a new issues analyst at Standard & Poor's. They have reached "maybe 20 times earnings for the market, whereas in France and other countries in Europe, the multiples are such lower," he said.
As a result, "they can sell less of their company at a higher price," Natale said.
Analysts expect the international rush to Wall Street to continue, with telecommunications stocks still leading the way. And the theme for 1997 is quality over quantity.
That means many investment bankers are advising marginal companies to hold off -- at least long enough to see if small cap stocks continue their rally beyond January. 
|
|
|
|
|
|
IPOnet
|
Note: Pages will open in a new browser window
External sites are not endorsed by CNNmoney
|
|
|
|
 |
|
