IPO Market Eyes Busiest Week Since 2007
A rough year for the initial public offering market may end with a bang, as companies rush to get their offerings out the door before the holidays.
With twelve deals on the calendar, next week is shaping up to be the busiest for U.S. IPOs since November 2007, when thirteen deals raised $2.5 billion the week of November 5, 2007, according to Renaissance Capital.
Among the offerings slated to price next week is social-networking software maker Jive Software, luxury brand Michael Kors and highly anticipated IPO from gaming site Zynga.
If at least nine deals price next week, it will be the most active week for IPOs this year.
No doubt, all eyes next week will be on Zynga, which could raise more than $1 billion and become the largest internet IPO since Google . The San Francisco-based company is currently looking at a price range of $8.50 and $10 per share.
But many analysts say Zynga stock may see a pullback after a first-day pop, as has been the case with other web IPOs this year—like Pandora , LinkedIn and Groupon .
Another “in demand” offering next week will come from Michael Kors, which hopes to raise $751 million by offering 41.7 million shares at a price range of $17 and $ 19 a share.
Founded in 1981, the global luxury brand booked $803.3 million in revenue in Fiscal 2011 as compared to $508.1 million in Fiscal 2010, a 58.1 percent year-over-year increase. Company’s net income was $72.5 million in Fiscal 2011 versus $39.2 million a year ago, a 84.7 percent year-over-year increase.
Jive Software may also be an attractive offering capitalizing on the trend towards cloud computing , says Mike Lubansky, senior financial analyst at Sageworks. “It may draw additional interest because of recent multi-billion dollar acquisitions of cloud computing companies by Oracle and SAP AG .”
There are also a slew of energy companies on the menu next week. Among them: Sanchez Energy, Laredo Petroleum, Mid-Con Energy Partners and Inergy Midstream.
“Strong oil prices and recent ongoing investor demand for yield oriented stocks have been a contributing factor to the year-end spike in energy IPO activity,” according to Renaissance Capital.
But some companies are still hesitant to proceed with their offerings in light of uncertain market conditions. So far in December, five companies withdrew or postponed their IPOs.
There have been sixty-four deals put on hold this year, most since 2008. The number of IPOs priced is down 20 percent compared to a year ago and total proceeds raised declined 11 percent, according to data from Renaissance Capital.
Analysts expect even more uncertainty for the IPO market in the coming year.
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