Warren Buffett“A public opinion poll is no substitute for thought.”
Adlin Sinclair“Success is a welcomed gift for the uninhibited mind.”
Volatile stock market weighing on IPOs (AP)
had a hard time finding willing buyers in January — a trend that will likely continue until the stock market stabilizes.
Of the 10 IPOs scheduled for January, only seven made it to market as investors fretted over the Obama administration’s plan to increase regulations on financial companies, growing
across the world, the Chinese government’s efforts to curtail credit, high unemployment and concern that U.S. stocks got overheated. The
swung more than 100 points in either direction in about a third of January’s trading sessions. Seventy percent of the big moves were declines.
“It’s hard right now,” said Paul Bard, vice president of
. “The IPO market does not respond well to volatility or uncertainty.”
When stocks calm down, investors should see good stuff: IPOs of companies with at least $100 million in annual sales and strong growth trends. Bard is watching for Internet and
, and smart grid developers.
Tesla Motors Inc., which said late Friday that it intends to raise $100 million in an IPO. Tesla has garnered attention for its high-end Roadster, an all-electric sports car that retails for $109,000. The company has not been profitable.
Many companies that have been attempting offerings, so far this year, have been bogged down by high debt and some have had no operating history.
IPO trackers expect the IPO market to improve in about a month or so.
But for now, executives of many private companies wanting to go public may be wary of pursuing an IPO because they’re concerned about getting a good price in a declining market, said Sam Stovall,
chief investment strategist. Meanwhile, investors are “sitting on their hands, just waiting to get a better feel for where the direction is,” he said.
In that environment, companies are reducing the size of offerings, accepting a lower price than they wanted or just pulling their deals altogether.
In recent days,
Terreno Realty Corp. threw in the towel after a reduced share offering still didn’t attract buyers. China-based Daqo
. postponed a pared-down IPO, citing market conditions.
company which had filed to go public, HealthPort Inc., said it was withdrawing its offering due to unfavorable market conditions, two months after delaying the IPO for the same reason. Another four slashed the size of their offerings. Most priced at the very bottom, or below expectations, to lure buyers.
-linked insurer Symetra Financial Corp., up 7 percent, and Chinese real estate broker IFM Investments Ltd., which slashed its offering to get to market, is up 2.5 percent.
A $107 million IPO from Imperial Capital LLC, a small
based in Los Angeles, is the only deal with potential in next week’s lineup, said Scott Sweet of IPOBoutique.
The other companies up next week aren’t all that attractive. Workers’ compensation insurer Patriot
.’s client base may not stay in business, he said. It focuses on small- to mid-sized companies, which have been hard-hit by the recession.
Biotechnology company Ironwood Pharmaceuticals Inc. only has one drug in late-stage development.
And a holdover from this week, Penthouse magazine publisher FriendFinder Networks Inc., is swimming in debt. The company delayed its IPO to answer questions from the
.
Even in a subdued economic recovery, fast-growing companies will be in demand, Renaissance Capital’s Bard said.
, jobs site
Solyndra Inc. to go public this year.
Of those, only Solyndra has signaled its intent to go public with the Securities and Exchange Commission.