Leave it to a retirement-plan kickstarter to breathe new life into the moribund IPO market.
Financial Engines
Even that gain wasn't enough. The stock opened at $15 and kept inching higher, up a whopping 44% yesterday for investors lucky enough to get in on the $12 offering price.
The secret sauce to Financial Engine's success isn't sexy or high-octane. The company advises on corporate 401(k) plan investing decisions. This isn't necessarily a titillating industry these days, judging by the recent performance of broader investing research specialists Morningstar
Financial Engines also isn't gargantuan. Revenue inched 19% higher to $85 million last year. The $5.7 million it delivered in net income for all of 2009 was also the company's first annual profit.
These may not be scintillating metrics, but Financial Engines runs a scalable business that should continue to improve.
The market will take it. Three of the five other companies to go public this month -- Baltic Trading
So yes, Financial Engines' 44% pop yesterday is as unusual as it is welcome. It may serve a greater purpose if it whets investing appetites. At the very least, it will make it easier for underwriters to move future offerings to a jaded audience that has been treated primarily to apathy on the IPO front lately.
Financial Engines isn't a growth demon, and it's not in a red-hot sector, but its successful debut is exactly what the market needed yesterday.
Do you own any stocks that have gone public in 2010? Tell us all about it in the comments box below.
