DealZone

U.S. no has-been for IPOs

According to the Russell Global Index, the United States’ market share for IPOs is plummeting. In a news release today Russell said that the U.S.’s share of IPOs in its index had declined to 13.7 percent for the past nine months, from 39.9 percent in 1998.

But don’t write off the U.S. IPO market yet. The Russell figures look at number of deals, not the dollar volume for the offerings.

So far in 2009, the U.S. is showing its old form again: according to Thomson Reuters data, U.S. IPOs account for 30.6 percent of overall global IPO dollar volume so far in 2009, with $1.6 billion, led by deals, large- by pediatrics nutrition maker Mead Johnson ($828 million) and small OpenTable ($60 million.) But measured in terms of deals, the US’s 7 deals make up only 6.8 percent of the 102 deals worldwide this year so far.

First day pop doesn’t guarantee longer term success

digitalglobeThursday’s IPO by satellite image maker DigitalGlobe was the fifth in row to surge in its first day of trading, rising 13 percent in another sign of the IPO market turning around. But a first day pop does not necessarily guarantee long-term success.

Just take a look at the other IPOs this year, with their respective first day pops:

- Mead Johnson, 10 percent (Feb. 11) (pediatrics nutrition)
- Changyou.com, 25 percent (April 2) (online video games)
- Bridgepoint Education Inc, 5.7 percent (April 15) (online college operator)
- Rosetta Stone, 40 percent (April 16) (language training software)

Disappointing Bridgepoint IPO brings glimmer of hope to VCs

Putting cold water on the idea that the IPO market was beginning to move past its doldrums, at least for fast growing companies, Bridgepoint Education‘s IPO priced 30 percent below expectations Tuesday night, going for $10.50 per share, a far cry from the $14-$16 range the college operator had hoped for.

Bridgepoint broke a short-lived two-IPO streak that saw Mead Johnson Nutrition Co and Changyou.com price at the top of their ranges and soar in their market debuts. And that was despite Bridgepoint’s enviable 150 percent revenue growth in 2008.

Still, Bridgepoint’s IPO brought some hope to venture capitalists, who have had to contend with a 90 percent drop in VC-backed IPOs in 2008, and are looking for an exit for their portfolio companies. Owned primarily by Warburg Pincus, Bridgepoint is the first venture-capital backed IPO since web hosting company Rackspace Hosting’s $187.5 million IPO in August 2008, according to Thomson Reuters.

Après le Changyou IPO, le déluge?

umbrella2Well maybe not yet, but it was a good week for IPOs, with hopeful signs the market is beginning to awaken from its long slumber.

Thursday’s IPO by Chinese video games maker Changyou.com had a first day “pop” of 25 percent, the strongest debut in a year, making it the third IPO in a row, after Mead Johnson in February and Grand Canyon in November, to do well.

Two more companies, language instruction provider Rosetta Stone and Bridgepoint Education, apparently buoyed by all the advance buzz around Changyou, scheduled their IPOs for pricing in two weeks.

IPO drought persists in Q1, no rain in sight

desertWith just a few days left, the first quarter of 2009 has been as miserable for the U.S. IPO market as the last few quarters were.

The first three months of the year saw one solitary IPO- a grand slam to be sure, an $828 million (including over-allotments) deal by kids food maker Mead Johnson Nutrition. In contrast, the first quarter of 2008, when IPO flow was already starting to fall off a cliff, had 10 deals yield a total of $20.6 billion.

It was the second quarter in a row to see only one deal, the first time such a six-month drought has happened this decade.

One smash IPO does not a recovery make

If mjn2one didn’t know better, one could think all was all right in the world of IPOs right now.

Mead Johnson, the kids’ nutrition unit of pharma giant Bristol Myers Squibb, scored a home run with its IPO this week, raising $720 million and selling 5 million more shares than expected. The stock has enjoyed a strong debut, rising 10 percent in its debut Wednesday and putting on track to be the first double digit “pop” since fluid-handling systems specialist Colfax jumped 25 percent after its IPO in May 2008.

It’s the largest IPO in the United States since April and brings some measure of relief to fee-starved investment banks.