Making a Ruckus in the IPO Market

It's usually a good sign when an IPO prices at the high end of its range. It's a fair indication that demand is strong among institutional investors and that retail investors will follow through on that excitement after a new issue starts trading.

It didn't work out that way last week for Ruckus Wireless (NYSE: RKUS  ) .

The provider of wireless systems for the mobile Internetworking market saw its shares priced at $15 on Thursday night -- at the top of its initial $13 to $15 pricing range.

The pop failed to materialize. Ruckus Wireless opened below $15 on Friday morning, and the shares kept sliding. The debutante closed out its first day of trading at $12.25, down a brutal 18% for the unlucky investors who got in on the IPO shares.

Ruckus generated plenty of attention as the first company to go public on a stateside exchange in two weeks.

If there's any kind of silver lining here for the companies nervously waiting in the IPO pipeline, it's that the three companies that went public earlier this month are trading above their initial price points.

Company

IPO

Nov. 16

Gain

Delek Logistics (NYSE: DKL  )

$21

$21.24

1%

Restoration Hardware (NYSE: RH  )

$24

$34.45

44%

Southcross Energy (NYSE: SXE  )

$20

$23.05

15%

Source: The Wall Street Journal.

Delek Logistics is a master limited partnership keying in on owning and operating midstream energy infrastructure companies. Its initial assets include hundreds of miles of crude-oil pipeline, as well as related storage facilities and light product terminals.

Restoration Hardware is a retailer of upscale home furnishings. Investors may remember the company trading under the ticker symbol RSTO before being snapped up by a private-equity firm in 2008. It's back, and it has also been this month's biggest winner.

Finally, we have Southcross Energy, an owner of natural-gas pipelines and a player in the liquefied-natural-gas market that's been booming lately.

The poor performance of Ruckus Wireless won't stop the IPO's own pipeline from flowing. There's a pair of companies set to go public during this holiday-shortened trading week. We'll see how that plays out.

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