John E. Fitzgibbon, Jr., editor of IPOscoop.com, told CNBC’s "Power Lunch" that the recent downturn in the broad market won’t crimp the supply of strong deals. Fitzgibbon said the quality of IPOs increases during tough times, giving investors an opportunity to buy shares in top-notch companies.
“The strongest deals go first,” Fitzgibbon said. “Then it works through to the lesser deals.”
Last week, the Dow Jones Industrial Average fell 3.3% in a single day -- a sharp drop, but not a record, Fitzgibbon said. Asked if volatility in the broad market would choke off the supply of IPOs, Fitzgibbon said, “I don’t see it.”
But he said weaker IPOs will continue to be postponed, cut in size or price -- and sometimes both -- to complete the deal.
Fitzgibbon said the successful launch of Fortress Investment Group, the first hedge fund in the U.S. to go public, is likely to create interest in other high quality deals in the sector.