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Where are all the IPOs?
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September 7, 1998: 9:34 a.m. ET
Offerings evaporate as sharp market declines give new issues the jitters
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NEW YORK (CNNfn) - With few public offerings in weeks and others suffering sharp declines, the IPO market doesn't appear to be having a very productive summer.
While this summer has been the most active IPO period this decade, with 134 issues raising $18.7 billion from June to September, according to CommScan Equidesk, the only vote of confidence for those deals, along with last month's newcomers, was that they didn't fall to zero.
The list of casualties runs deep and wide. IPOs debuting this summer fell an average of 13 percent. That's marginally better than the average performance for all of this year's 357 deals, of which 88 percent are now below what investors initially paid.
While the hottest issues weren't able to defy the odds, their setbacks were relatively bearable. IPO experts had predicted high-flying offerings, because of their unjustifiable valuations, would drop twice as fast as the bigger-cap stocks.
As of Sept. 1, the 50 best performing IPOs dropped 27 percent from their 52-week highs. Yet the average decline from 12-month highs for the big caps was 23 percent, according to Salomon Smith Barney.
Two of the lead performers, Broadcast.com (BCST) and Inktomi, fell only 18 percent from their 52-week highs of $59.75 and $88.75, respectively. Inktomi (INKT) remains up 185 percent and Broadcast.com is still up nearly 100 percent.
The IPO that took the sharpest hit was ARM Holdings, with a 29-percent descent from its 52-week high of $63; still, it's up 85 percent.
Looking ahead, more than 70 deals are slated to go public as many underwriters view the current market malaise as temporary.
But the broader market will dictate whether these offerings ever take place. If history is any gauge, the probability of that is slim. September historically is the weakest month of the year for IPOs and the time of third-quarter pre-announcements. Tax-loss selling also may appear early this year. 
-- by staff writer Bambi Francisco
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