Market ripe for IPOs
IPO fever is back.
Five years after the financial crisis dampened enthusiasm for initial public offerings, investors are again eager to buy shares when companies start trading. Twitter is the star this week, but the number of offerings shows that social-media darlings are not the only ones seeking and attracting investors.
There have been 190 offerings this year, and momentum has built as market indexes have set highs. October's 33 offerings made it the busiest month since November 2007, according to data provider Dealogic. And a dozen expected offerings this week tie it for the busiest week of the year.
“It's a wild week in IPO land,” said Scott Sweet, who runs IPOBoutique, which researches and invests in IPOs.
A more active IPO market signals investor confidence in the economy. And the cash that companies raise in an IPO can help them invest and hire more, potentially supporting economic growth.
Twitter is the big one. On Monday the online short-messaging service raised the expected price for its shares to $23 to $25 each, up from $17 to $20. The new price is enough to raise more than $2 billion. It is expected to trade on the New York Stock Exchange under the symbol “TWTR.”
Twitter appears cautious about how much it is seeking from investors after Facebook's IPO last year. On its first day of trading, Facebook's stock finished just 23 cents higher than its $38 IPO price, and it lost more than half of its value in its first four months.
Although the shares are 28 percent above their IPO price, many investors believed Facebook stock was priced too high initially. Twitter's price range was lower than many analysts expected. Many market watchers believe Twitter is trying to avoid the perception that its shares are overpriced.
“They're obviously learning from the very serious mistakes Facebook made,” Sweet said.
It's not unusual for a bull market in stocks to bring out the companies that want to raise money from the public.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Toyota to invest $50M in driverless technology with Stanford, MIT partnership
- Farmers fear 2nd attack of bird flu
- Bank of New York Mellon computer glitch examined for harm to investors
- Voice-assist technology gets big push toward mainstream vehicles
- Alcoa putting $60M into Upper Burrell tech center expansion
- U.S. adds 173,000 jobs in August, dropping unemployment rate to 5.1 percent
- Idea Foundry CEO Matesic decides which new companies get help from his Pittsburgh business incubator
- Is safety impaired when braking makes car shake?
- Jobs report fails to provide clarity to investors
- Save big money with comparable model of vehicle
- Trimmer Pilot belies more room, power