The IPO Party Left Without You

Cobwebs are starting to gather at IPO watch parties.

There weren't any companies going public on stateside exchanges last week, and this week promises to be equally barren.

There's no need to panic. The new blood will trickle in. There are just several reasons that this hasn't been a good time for an IPO:

  • After the holiday lull, companies that were waiting to go public did so during January and early February.
  • After several weeks of rallying equity prices, the market has cooled lately.
  • Fears of the sequester that will trigger a wave of automatic spending cuts if left unchecked by the end of this week have led to volatility. Underwriters and potential buyers don't like dealing with the uncertainty.

It probably also doesn't help that the last company to go public -- Xoom (NASDAQ: XOOM  ) -- has been mortal lately.

The fast-growing payment platform was a star when it went public two weeks ago. The IPO was priced at $16, and that wasn't enough. The stock opened at $21, closing at $25.49 on its first day of trading.

It's been largely all downhill from there, as Xoom closed lower every single trading day last week.

Xoom has yet to turn a profit, but revenue soared 60% last year. Enabling financial transactions wasn't always sexy, but that has changed with the booming popularity of PayPal and Square. Xoom serves 30 different countries, allowing for the seamless transfer of money at cheaper rates than traditional platforms.

However, investors tend to steer clear of freshly minted issues when the market starts to slip, and that's why Xoom and many of its fellow February debutantes are starting to sputter after initial pops.

Let's take a look at the rookie class for February.

Company 

IPO

Feb. 22, 2013

Gain/Loss

Xoom

$16

$20.34

27%

Orchid Capital 

$15

$14.75

(2%)

ConnectOne Bancorp

$28

$29.40

5%

Health Insurance Innov.

$14

$12.53

(11%)

New Source Energy

$20

$20.00

0%

ZAIS Financial

$21.25

$20.25

(5%)

ExOne

$18

$26.65

48%

Boise Cascade

$21

$26.80

25%

Zoetis

$26

$32.59

25%

Source: The Wall Street Journal.

Unlike January's IPO class, where just one stock closed out the month below its original price, there are a few busted IPOs this time. Let's bypass those disappointments to take a look at the five winners instead.

We already covered Xoom, so let's start with New Jersey-based banker ConnectOne  (NASDAQ: CNOB  ) . Regional bankers may not have the same sizzle as the "too big to fail" names, but smaller banks that are still around and growing are largely the ones that didn't take on too many risks ahead of the financial crisis.

ExOne  (NASDAQ: XONE  )  has been this month's biggest winner, even if its timing could've actually been better. ExOne went public just as the 3-D printing craze cooled off with investors. ExOne's industrial 3-D printers can mold heavy-duty materials including stainless steel and bronze into objects.

If ExOne's timing was off, Boise Cascade's (NYSE: BCC  )  debut came at the perfect time. The maker of wood products used in the construction industry hit the market just as the housing market is bouncing back. Homebuilders are starting to build healthy backlogs of orders, and they're able to charge more for their finished homes.

Finally, we have Zoetis  (NYSE: ZTS  ) . The first company to go public this month also happens to be one of the biggest IPOs. The maker of pet medicines and vaccines was spun off on Feb. 1 by drug giant Pfizer

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