IPOs take flight

Public markets get ready for more listings from big name and private equity firms.

EMAIL  |   PRINT  |   SHARE  |   RSS
 
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)
By Alyssa Abkowitz, reporter

ipos_take_flight.03.gif
How are you doing financially compared to the start of the year?
  • Better
  • Worse
  • About the same
CDs & Money Market
MMA 0.39%
$10K MMA 0.35%
6 month CD 0.38%
1 yr CD 0.70%
5 yr CD 1.51%

Find personalized rates:
 

Rates provided by Bankrate.com.

NEW YORK (Fortune) -- After a six-month hiatus of initial public offerings, the market looks to be heating up.

Though there have been only 49 filings this year -- a 66% drop from 2008 -- 25 of those filings occurred in July and August. And these aren't unknown companies: Dollar General, Hyatt Hotels, and Ancestry.com are just a few looking to hit the trading floor.

On Thursday alone, five companies went public. That's the most in one day since Nov. 15, 2007, when six debuted.

The newly public companies received a mixed reception. U.S. car battery maker A123 Systems (AONE) was by far the best peformer, with its stock skyrocketing a whopping 43% midday. The other four firms that debuted Thursday were two REITS: Apollo Commercial Real Estate Finance (ARI) and Colony Financial (CLNY), as well as asset management firm Artio Global Investors (ART) and online drugstore Vitacost.com (VITC).

There are three more expected to go public before this week is out and an additional eight are on tap to debut over the next two weeks.

The average IPO has returned 23% from its offer price year to date. The Renaissance IPO Composite Index, a float-weighted index of IPO performance, has returned about 42% so far this year, compared with 18% for the S&P 500.

"I'm willing to go out on a limb and say there will be more offerings this year than in 2008," says Kathy Smith, a principal at Renaissance Capital, an IPO data tracker based in Greenwich, Conn. "We're already at 27 IPOs done, and there were only 42 done last year. We expect to see an awful lot September through December."

"I'm willing to go out on a limb and say there will be more offerings this year than in 2008," says Kathy Smith, a principal at Renaissance Capital, an IPO data tracker based in Greenwich, Conn. "We're already at 22 IPOs done, and there were only 42 done last year. We expect to see an awful lot September through December."

Despite the optimistic prediction, Smith cautions that the IPO market isn't open to everyone. Financial firms -- like mortgage REITs Starwood Property (STWD) and PennyMac (PMT) -- are active now because of low interest rates set by the Federal Reserve. And many of the offerings are coming from private equity shops -- both leveraged buyout types and venture firms.

"They have portfolios chock-full of companies in need of harvesting and haven't been able to because there was no market," Smith says. "We're seeing the very best of their companies coming out first to gauge investor appetite."

Case in point: On Aug. 20, LBO giant Kohlberg, Kravis & Roberts filed for discount chain Dollar General to go public and raise $750 million. And the Pritzker family, owner of the Hyatt Hotels, filed on Aug. 5 to raise $1.15 billion through its offering.

Other companies that have submitted IPO filings include clothing retailer rue21, Marathon Real Estate, and Shanda Games Limited.

As for industry standouts, tech is king.

OpenTable (OPEN), the online restaurant reservations site, priced at $20 in late May and has seen returns around 48%.

Bridgepoint Education (BPI), which offers online B.A., M.B.A., and Ph.D. degree programs, priced at $10.50 in mid-April and has seen returns of 87%.

And Changyou.com (CYOU), a Chinese online gaming company that decided to trade only in the United States, set an offer price of $16. Its return so far? An astounding 140%. To top of page

Company Price Change % Change
Bank of America Corp... 16.82 -0.23 -1.35%
Ford Motor Co 14.59 -0.20 -1.35%
Facebook Inc 76.55 -2.49 -3.15%
Apple Inc 99.18 -1.57 -1.56%
Cisco Systems Inc 25.03 -0.14 -0.56%
Data as of Oct 1
Index Last Change % Change
Dow 16,804.71 -238.19 -1.40%
Nasdaq 4,422.09 -71.31 -1.59%
S&P 500 1,946.16 -26.13 -1.32%
Treasuries 2.40 -0.10 -4.19%
Data as of 5:53am ET
More Galleries
Here are the 20 most ticketed cars in America The racy Subaru WRX tops the list, but some of the other ticket magnets will surprise you. More
Lamborghini to unveil 910 horsepower plug-in hybrid The Lamborghini Asterion concept car will have a V10 engine and three electric motors. More
The weapons of The Walking Dead Zombies are fiction, but the weapons on The Walking Dead are real. More
Worry about the hackers you don't know 
Crime syndicates and government organizations pose a much greater cyber threat than renegade hacker groups like Anonymous. Play
GE CEO: Bringing jobs back to the U.S. 
Jeff Immelt says the U.S. is a cost competitive market for advanced manufacturing and that GE is bringing jobs back from Mexico. Play
Hamster wheel and wedgie-powered transit 
Red Bull Creation challenges hackers and engineers to invent new modes of transportation. Play

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.