Initial public offerings in the U.S. are suffering the worst returns since at least 1995 at the same time that the stock-market rally is spurring the most new listings in almost two years.
The IPOs of 15 American companies since September have outperformed the Standard & Poor’s 500 Index by 2.3 percentage points on average in the first month of trading, the smallest margin in Bloomberg data going back 14 years. Offerings by U.S. companies have beaten the S&P 500 by an average 21.3 percentage points after their listings, the data show.
While investors participating in more than half of the sales since September are sitting on losses, sellers from Cerberus Capital Management LP to Welsh Carson Anderson & Stowe have reaped $6.7 billion taking companies public. Cambiar Investors and Huntington Asset Management say IPOs won’t produce outsized gains when many companies are weighed down by debt.
“The IPOs you can get, you don’t want, and the IPOs you want, you can’t get,” said Brian Barish, president of Denver- based Cambiar Investors, which oversees about $5.5 billion. “There have been some pretty junky deals that have come out.” Barish’s $1.08 billion Cambiar Opportunity Fund has beaten 98 percent of rival funds over the past year....MORE
That was my point in "A123 Systems jolts IPO market (AONE)":
I don't have an interest in IPO's in general (all the allocation shenanigans, quid pro quo, etc.) but would be remiss if I didn't at least mention this one....*Meet the New IPO Sheriff in Town: China