IPOs taking tentative steps in wake of Facebook
SAN FRANCISCO (MarketWatch) -- A little more than a month has passed since
Facebook's (FB) stock debuted on May 18 at $38, but after an initial bump the shares stumbled, closing on their first day at $38.23 -- and as of Wednesday, the stock is down more than 16% from its IPO price.
But this week, some signs of life began to emerge in IPOs, as four companies, including cloud-based software provider ServiceNow Inc., are pricing shares and estimating their first day for trades. All of the firms are scheduled to debut on the week of June 25, which would be at least 26 business days since Facebook's May 18 IPO.
ServiceNow has priced 11.65 million shares at between $15 and $17 each, while Exa Corp., a developer of support-simulation software used by auto makers, has set a price range of $11 to $13 for the 6.3 million shares it plans to offer.
Also filing to go public have been EQT Midstream Partners LP, which intends on selling 12.5 million shares at $19 to $21 each, and biopharmaceutical firm Tesaro, which has a price range of $12 to $15 for the 6 million shares it has filed to offer next week.
"It was literally a shock in that a couple of days ago, most analysts thought we were done with IPOs until past July 4," said Scott Sweet, of IPO Boutique, which tracks data regarding IPOs. "Suddenly, these IPOs showed up."
Renaissance Capital, in a report on the state of the IPO market, called these first deals that come after a long dry spell "icebreakers." Such icebreakers, Renaissance added, tend to be "attractively priced growth companies."
However, according to Sweet, the new filings come after 14 IPOs have either been withdrawn or rescheduled since the reaction to Facebook's offering cooled enthusiasm for IPO stocks. Read how Facebook's IPO is prompting inquiries on Capitol Hill.
He said the companies that had filed to go pubic but changed plans following Facebook included Corsair Components Inc., a maker of computer storage and gaming products; Tria Beauty Inc., which sells laser-hair removal and aesthetic products; and Objet Inc., which develops 3-D printing technology.
There is likely to remain some sensitivity toward IPOs for some time to come, Sweet added. "There's very little trust in the IPO market at this time. If these deals that are set to come out don't work after what Facebook showed, this temporary thaw could be a freeze again."