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Class of '96 IPOs fall flat
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March 6, 1997: 9:23 p.m. ET
After all the hype and excitement, shares fail to live up to expectations
From Correspondent Bill Tucker
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NEW YORK (CNNfn) -- More money and more deals were made in the initial public offering market last year than ever before. But for all the hype and excitement, many of the new issues have suffered since they made their debuts.
Investors large and small poured more than $50 billion into new stock offerings in 1996, helping 875 companies that sold stock for the first time. Many of them, though, are now disappointed as a large percentage of issues fell below expectations.
"When companies first come public, there's a lot of hype, anticipation. The company is out hyping the IPO on a road show and investors get very excited and they might pay a bit higher than they may in normal situations," Ryan Jacob, new issue analyst at IPO Value Monitor, said.
Of the companies that posted the top ten biggest first day gains, half are now trading below their first day closing price.
Only one issue -- computer services outsourcing firm Sykes Enterprises -- is trading above its first day closing price.
Part of the problem, according to analyst Robert Natale of Standard & Poor's, was that many underwriters brought weak companies to market. (203K WAV) or (203K AIFF).
Another contributing factor to the slump in the stocks is an oversupply of shares available, which usually occurs at the end of the 90-day restriction on insider selling, when executives are allowed to sell their stock. 
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IPO Monitor
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