The IPO Market goes through cycles: booms, busts and corrections. The IPO market is sometimes characterized as a window that is open or shut. In my experience, a number of factors can impact the IPO market, including market volatility (measured by VIX), valuations, supply and demand, overall stock market trend, investor sentiment and sector trends.
There's a good article posted yesterday from USA Today "IPO Market is Casualty of Stock Market Pullback" that discusses some of these factors. The article discusses some recent IPOs and their pricing and post-IPO performance. One factor the article discusses is the first day pop, and indicates that the first-day pop for 2014 YTD and 2013 was 17% and that IPOs that started trading yesterday had an average return of 8.7%. Most IPOs are priced with a 15% discount as incentive to IPO buyers to buy the offering. Because everyone knows that this discount is built in, most people expect a surge in stock price once the offering begins trading. While an average return of 8.7% isn't stellar, it's still not too shabby.
Link:
http://www.usatoday.com/story/money/markets/2014/04/17/ipo-market-cools/7830837/
There's a good article posted yesterday from USA Today "IPO Market is Casualty of Stock Market Pullback" that discusses some of these factors. The article discusses some recent IPOs and their pricing and post-IPO performance. One factor the article discusses is the first day pop, and indicates that the first-day pop for 2014 YTD and 2013 was 17% and that IPOs that started trading yesterday had an average return of 8.7%. Most IPOs are priced with a 15% discount as incentive to IPO buyers to buy the offering. Because everyone knows that this discount is built in, most people expect a surge in stock price once the offering begins trading. While an average return of 8.7% isn't stellar, it's still not too shabby.
Link:
http://www.usatoday.com/story/money/markets/2014/04/17/ipo-market-cools/7830837/
