The Snap IPO went smoothly, here's what's next

The Snap IPO was one of the smoothest openings we have seen in a long time. No drama at the pre-open, the open, during the day, or the close.

It priced at $17, opened at $24, closed at $24.48.

Why the pop? Four reasons:

1) Markets are at historic highs, the most important factor of all. But a strong stock market is a necessary, but not sufficient, ingredient in an IPO pop.

2) IPO returns have been strong. The average IPO in the last year (March to March) is up 26.4 percent, according to Renaissance Capital. The Renaissance Capital IPO ETF, a basket of the 60 most recent IPOs, is up about 28 percent.

3) Lack of in-demand IPOs. It was a miserable year for IPOs in 2016: 169 companies went public, a nearly 40 percent decline from 2014. 2017 has started out poorly as well. There's plenty of demand, there's just nothing to buy that investors want at the right price.

4) A small float — just 14 percent of the company. This is a typical tactic of tech-oriented firms, which often seek to keep the float to about 10percent or a little more to keep the scarcity level high.

What's next? I've been waiting for the IPO market to open up since late June of last year (seems like forever), but this may finally do it. I am hearing calendars are starting to fill up, bankers are being called.

All of this could fall apart if the market heads south, but here's a few thoughts.

There's three companies doing road shows: 1) Canada Goose, a maker of high-end parkas, 2) women apparel seller J. Jill, and 3) Presidio, a reseller of IT products.

That's a good sign. But there's a raft of companies sitting out there — more than 100 — that could quickly make announcements. Potential candidates:

Mulesoft , an enterprise software firm
Cloudera, a data analytics platform
Chuck E. Cheese, an operator of over 700 family-style restaurants and entertainment centers
Prosper Marketplace, a peer-to-peer lending company

OK, so there's no Uber's or Dropbox's or Spotify's here, but these are substantial companies. And even companies that have been putting off their IPOs like Blue Apron, which provides pre-packaged meals for home meal preparation, could revive if the market holds up.

This is just the tip of the iceberg. If the market holds up and the early chatter is right, we should start seeing the calendar dramatically increase by mid-April.

  • Bob Pisani

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

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