After a frothy summer that treated investors to opening-day pops for electric car maker Tesla Motors (Nasdaq: TSLA) and leading Indian travel portal MakeMyTrip (Nasdaq: MMYT), enthusiasm cooled substantially greeting last week's debutantes.
All three of the companies that weathered the storm to go public late last week are trading pretty much where underwriters handed off the shares to their initial public investors.
On the bright side, it's always nice to see a lack of busted IPOs (or stocks that quickly tank below their debut prices). However, ho-hum returns also won't help when underwriters try to move similar offerings in the future.
|
Stock |
Date |
Offer |
Oct. 18 |
Gain |
|---|---|---|---|---|
|
Body Central (Nasdaq: BODY) |
Oct. 15 |
$13.00 |
$13.06 |
0% |
|
Tower International (Nasdaq: TOWR) |
Oct. 15 |
$13.00 |
$13.00 |
0% |
|
Campus Crest (NYSE: CCG) |
Oct. 14 |
$12.50 |
$12.70 |
2% |
Source: Yahoo! Finance.
These are three companies in entirely different industries. Body Central operates a chain of 204 clothing stores, selling everything from trendy basics to homecoming dresses. Tower makes car parts, having emerged from bankruptcy a few years ago. Campus Crest is a REIT, with interests in 27 different student housing properties.
If the market's reaction appears ho-hum, you should have heard the boo birds earlier this month. Body Central and Tower had to drop below their initial price ranges to round up enough buyers. Campus Crest filed to go public between $12.50 and $14.50 -- and had to sleep on the floor when it went public at $12.50.
Are investors tired of chasing IPOs or are these just the wrong companies? With the exception of Tesla, most of the blazing debutantes have been overseas speedsters. This month's hottest IPO -- by far -- is ChinaCache (Nasdaq: CCIH). The company often described as the Akamai (Nasdaq: AKAM) of China has nearly doubled since its debut three weeks ago at $13.90.
The sentiment can change, naturally. Investors would be giddy if dot-com darlings Facebook, Twitter, and Groupon were filing to go public.
Patience -- the same virtue that new buyers of Body Central, Tower International, and Campus Crest are banking on -- will have to wait to pay off.
What private company would you like to see go public in 2010? Share your answer in the comment box below.
