initial public offerings (IPOs) trading on American exchanges

Tuesday, March 18, 2014

2014 far

The IPO market is moving at a blistering pace with the average price of new issues this year up nearly 40% from their offering price.

And the 45 initial public offerings completed thus far is double the amount from the same period last year, according to Renaissance Capital. They've raised $7.6 billion, up 28%.
"We're off to a very strong start this year and we think at the beginning stage of a new long-term IPO cycle," said Linda Killian, portfolio manager for the Global IPO Fund at Renaissance Capital, an IPO investment and research firm.

From 2008 through 2012, IPO offerings per year were, on average, less than half of historic norms. That changed in 2013 when 222 IPOs launched, the most since 2004. So far, 2014 is on pace to exceed last year.

IPO market enthusiasm is expected to accelerate now that China e-commerce giant Alibaba Group confirmed it plans to file an IPO on the U.S. market. Though Alibaba did not specify a time, speculation is the filing might come in April. This follows Friday's news that Sina's (SINA) Weibo, a Chinese microblogging service similar to Twitter (TWTR), filed paperwork for its IPO with plans to raise $500 million.

Other high-profile tech IPOs expected this year include cloud storage operator Box and Dropbox, online music provider Spotify, wearable camera maker GoPro, and GrubHub, an online portal for food delivery service.

"All of this brings positive attention to the IPO market and underlines how important it is to equity markets overall and our economy," said Killian.

(Nearly) Double Coupons
Also fueling enthusiasm is the performance of recent tech IPOs. Varonis Systems (VRNS) stock doubled on its first day of trading Feb. 28. Varonis provides software that companies use to get a deeper understanding of data buried within digital files.

Online coupon provider (COUP) rose 88% on its first day of trading March 7.
Last week's four enjoyed an average first-day pop of 48%, according to Ipreo Capital Markets. That included Castlight Health (CSLT), which spiked 149%, the year's best debut after Dicerna Pharmaceutical (DRNA), which jumped 207% on Jan. 30. The next day came Ultragenyx Pharmaceutical (RARE), which rose 101%.

Already four IPOs have more than doubled this year, vs. six in all of 2013, Ipreo said.
The health care sector has dominated the IPO market, with 26 of the 45 thus far this year, primarily in the biotech field.

"The enormous amount of biotech IPOs is a continuation of 2013 but at an even faster pace," said Scott Sweet, senior managing partner at

The downside, said Sweet, is that top-notch biotech IPOs, in the foreseeable future, are already out the door. "They're getting weaker in quality," he said.

A10 Networks Soon
Ten IPOs are slated for this week. Among those receiving the most attention is A10 Networks, which makes technology that accelerates data center networks. Rivals include F5 Networks (FFIV), Radware (RDWR) and Cisco (CSCO).

IPOboutique says its channel checks reveal that A10 is in strong demand, already multiple times oversubscribed.

Checks also suggest strong demand for Paylocity Holding, a cloud-based provider of payroll and human management software, Q2 Holdings, a provider of cloud-based banking services, and Akebia Therapeutics, a developer of anemia treatment.

Other IPOs this week include international e-commerce services provider Borderfree; Amber Road, a cloud-based provider of trade management software; and Globoforce, a provider of cloud-based social recognition software.

Another five IPOs are lined up for next week. They include King Digital Entertainment, the high-profile maker of the "Candy Crush Saga" online game. King Digital expects to raise $500 million by selling 22.2 million shares in a 21 to 24 range. That would give it a $7.6 billion market cap at the high end.

Alibaba The Big Prize
But the upcoming king of all IPOs is Alibaba. It's expected to surpass Facebook (FB) as the largest-ever U.S. tech IPO in terms of money raised and market value.

Alibaba is China's top e-commerce provider, described as (AMZN), eBay (EBAY), PayPal and Google (GOOG) all wrapped into one. Analysts say its IPO could raise $20 billion and give the company a market valuation of $100 billion to $150 billion.

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