Trader Talk

Alibaba and the nine IPOs: offerings try to get over big hump

Share's headquarters in Hangzhou, China
Thomas Lombard | Wikipedia

After much a due, Alibaba's initial public offering (IPO) filing appears imminent, at a time when the IPO market seems to be thawing a bit. Financial data company Markit filed for an IPO yesterday, saying it expects to raise up to $750 million (it provided no guidance on terms).

The contenders are lining up: car-pricing comparison website TrueCar yesterday said it anticipates pricing 7.78 million shares at between $12 and $14, raising at much as $108.9 million in its debut. Zendesk (a cloud based customer service software) also set terms: 11.1 million shares at $8$10.

Arts and crafts store Michaels re-filed for an IPO on Thursday, after withdrawing its offering (which was already delayed) back in December.

All of that is the future. We will see the first test of the market this week, when nine IPOs will price.

Twitter IPO lockout a non-event: Pro

The big test is Wednesday night, when five of those number will come to market.

For example, Cheetah Mobile (CMCM), a Chinese mobile security app company, is pricing Wednesday night for Thursday, seeking to raise 12 million shares at $12.50—$14.50 a share. Gaslog Partners (GLOP), a liquidified natural gas carrier, is seeking to raise 8.4 million shares at $19$21.

Why is this a test? Because the market is littered with broken IPOs this year. According to Renaissance Capital, 44 percent of the deals done in 2014 are now languishing below their IPO price. Not only that, but 36 percent have priced below their range. Among the last 20 IPOs, 75 percent have priced below their range.

Apparently, buyers are pushing back against valuations.

Speaking of old IPOs, Twitter's lockup expired last night. I don't care how many large holders declare they are not going to sell: Twitter went public at $26 a share in November, and is now trading in the mid-$30s. However, insiders own the stock much lower. The average cost basis for all insiders is $2.21.

Think someone's going to sell?

--By CNBC's Bob Pisani