- LATIN AMERICA
- MIDDLE EAST
- United Kingdom
- United States
- New Zealand
- South Africa
Technology has been a driving force in this year's initial public offerings.
Consider ChangYou.com Ltd. (CYOU), a Chinese online game developer whose stock price jumped 25 percent at its offering day in April on the
The company recently had the U.S. launch of its Dragon Oath martial-arts online game, a hit in Asia for the past three years. It has three more online games scheduled for release here and is opening a subsidiary in Santa Clara, Calif.
Among the 16 other tech IPOs in 2009, price gains of better than 30 percent since their offering have been produced by
In a year of other IPO gains by familiar names such as
But don't get the impression we've returned to the wild-and-crazy IPO markets of the past. Some planned IPOs haven't even hatched and others have quickly laid an egg because investor caution rules the roost.
"Demand for IPO money continues to run off the scale, as the need for companies to access the capital markets increases," observed David Menlow, president of IPOfinancial.com in Millburn, N.J. "However, the tug of war is between the comfort level of potential investors and the need for capital for these companies."
Investors are wary of debt-laden companies put on the IPO block by private-equity firms. An example is the
Rather than focus on one market sector, an investor should examine each IPO carefully to see if it makes sense, Menlow advised. Years ago, investors couldn't care less what an IPO did because they just wanted in on the deal, resulting in "a lot of dogs with fleas" among those IPOs, he said.
"We're in the last stage of a double-dip recession and starting to see some rays of sunshine in the IPO market," said Linda Killian, portfolio manager of
Getting the 2009 IPO market off on the right foot was
"Individual investors can look for good IPOs that have traded down since they were offered," said Killian. "For instance,
Institutional investors still drive the overall IPO market, since only select investors at full-service brokers typically get the opportunity to invest in IPOs. Most average investors invest in IPOs on the secondary market after their initial price pop.
"The overall stock market is driving the IPO market, which is playing catch-up," explained John Fitzgibbon, founder of IPOScoop.com in Edison, N.J. "The IPO market is a follower, not a leader, and you must have a good stock market in order to get a good IPO market."
Among financial IPOs,
"I always keep an eye on the initial IPO filing versus the final filing, since an increase indicates excessive demand and therefore likely good aftermarket performance," he said.
He is less enthusiastic about
Investing - IPO Activity Is Up, But Examine Each Offering Carefully