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From hot to not: IPOs all wet after fiery start

Traders wait for the Initial Public Offering for Castlight Health on the floor of the New York Stock Exchange after the opening bell on March 14, 2014 in New York City.
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Traders wait for the Initial Public Offering for Castlight Health on the floor of the New York Stock Exchange after the opening bell on March 14, 2014 in New York City.

The formerly hot initial public offering (IPO) market is repricing, in what is starting to become a regular occurrence: delayed IPOs and flotations below the initial price talk.

Last night, two IPOs that were delayed from last week came to market, but disappointed on their respective offering prices.

Payroll software provider Paycom Software priced 6.6 million shares at $15, well below the $18 to $20 range. Separately, City Office REIT (Real Estate Investment Trust) priced 5.8 million sharesless than expectedat $12.50, below the $14 to $16 price talk.

They follow three other IPOs that priced below their range last week:

1. On Friday, food and medicine manufacturer for farm animals Phibro Animal Health (PAHC) priced 11.7 million shares on the Nasdaq at $15, below the $16 to $18 price range;

2. Last Thursday, Cerulean Pharma (CERU) priced 8.5 million shares on the Nasdaq at $7, well below the $11 to $13 price talk; and

3. Last Wednesday, hotel operator La Quinta (LQ) priced 38.2 million shares—more than expected—at $17, below the $18 to $21 range.

Since it bears mentioning, what genius penciled in this year's IPO calendar? We have 10 other offerings scheduled to price this week...which features Passover, Easter, and Spring Break.

Really?

Elsewhere

1) Yesterday's action was hardly encouraging for bulls. Talk about a zigzag session: when you have the Dow rise 160 points from the open to the middle of the day, then drop 120 points in a little over an hour, then rally 120 points in a straight line 45 minutes going into the close, that is hardly encouraging action. I don't think you can blame everything on light volume, either. We are still trying to figure out if enough leverage has been taken out of the system.

It's still not clear if traders are "selling on strength" or "buying on weakness."

2) Oh China—another day, another weak data series. We are waiting for first quarter gross domestic product that will be out tonight (the expectation is for growth of 7.3 percent), but overnight the Shanghai Index was down 1.4 percent as money supply (M2) grew at a pace of 12.1 percent in March, less than the expected 13 percent gain and a 13-year low.

Speaking of China—gold is down 2.5 percent as the World Gold Council reported that physical demand for gold remained weak. Like copper, a lot of Chinese firms have locked up in gold to financial deals. That means a lot of it is collateral rather than consumer demand...remember the whole ruckus with copper a month or so ago?

--By Bob Pisani

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  • A CNBC reporter since 1990, Bob Pisani covers Wall Street from the floor of the New York Stock Exchange.

Wall Street