initial public offerings (IPOs) trading on American exchanges

Monday, July 25, 2011

July a hot month for IPOs

July is turning into one of the hottest months in recent memory for initial public offerings.

Already this month, several high-profile companies including Zillow, Skullcandy and Francesca’s have begun selling shares publicly. Capping off the month, shares in Dunkin’ Brands are widely expected to start trading this week, along with a handful of other companies.

The rash of offerings comes as the IPO market finally starts to thaw after several years of economic uncertainty, more recently compounded by worries about the national debt. Those worries have delayed some offerings, but now many companies are moving forward.

"You have a big backlog of deals in the pipeline — quality-type companies, well-known companies — that are starting to muscle past this blockage," said John Fitzgibbon, founder of IPO

Fizgibbon's website lists at least 18 companies that either are expected to begin trading this month or already have completed their IPOs. That could make this the busiest July since 2007, before the onset of the credit crisis.

The busy month comes on the heels of several other highly publicized public offerings earlier this year from well-known Internet companies including LinkedIn and Pandora.

The "rocket-shot" opening days seen in some of the offerings, such as Zillow's explosive debut , have inevitably revived memories of the dot-com boom and subsequent bust. But experts say that despite the renewed excitement about public offerings, things are far tamer than a decade ago.

"This isn’t like insanity-dot-com of 1999 and 2000," Fitzgibbon said.

Investors, many of whom were battle-scarred by the big bets and big losses of the dot-com era, appear to be paying closer attention now to whether these new companies have shown true potential for shareholders.

"Investors appear to be a bit more savvy, a bit more informed, and they’re not just picking anything that’s coming down the line," said David Menlow, president of

Many of the companies going public this month can point to stronger foundations than generally seen in the dot-com era, when hot frequently companies rushed to the public markets with little evidence of how they planned to turn a profit in the years to come.

Zillow, the online real estate marketplace that went public last week, has been methodically building and expanding its business since its founding in 2004. Dunkin’ Brands, which is expected to go public this week, is parent to a well-known consumer brand that has been around for more than 50 years.

Still, even a longer track record and a hot brand is no guarantee that these initial public offerings will do well. Economic conditions are improving quite slowly, and investors remain skittish.

Shares in LinkedIn, the social networking site for jobseekers, dipped sharply shortly after the company went public in May, although shares have recovered in recent weeks.

Pandora Media, the Internet-based music offering, also saw shares fall following its debut on the public market in June.

Another hotshot social media company, Groupon, attracted some skepticism earlier this year after revealing plans to file for an IPO – along with a record of hefty losses. Still, many are hotly awaiting the daily deal company’s public offering.

And of course there is wild and incessant speculation about when social media’s 800-pound gorilla, Facebook, might finally begin selling its stock to the general public.

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