Tid Bit: IPOs’ High Speed

Zoom. IPOs are making headlines again.

Ten companies completed their initial public offerings last week, making it the biggest week for IPOs since November 2007. Chinese offerings dominated, with Youku.com (YOKU), described as a “cross between the US’s YouTube and Hulu” jumping $161 in its first day of trading. That’s the largest “first-day pop since Baidu went public in 2005”  according to Renaissance Capital.

Of course, IPOs are often volatile and for every Youku, there’s a Make My Trip (MMYT). That Indian online travel planning site has suffered a big drop in the last few months.

Burnt by a history of recommending Chinese IPOs that promptly “flopped” — including China Ming Yang (MY) and Bitauto Holdings (BITA) Mad Money’s Jim Cramer has warned that investors who’ve seen their IPOs rise should take their profit off the table.

Those that do well for some time, like online reservation gatherer Open Table (OPEN) can become pricey. Now $72 a share, up from $57 three months ago, the company trades at a remarkable 142 times earnings. Other young climbers include network security software maker Fortinet (FTNT),  Open Table, and elecrtic car manufacturer Tesla Motors (TSLA).

According to Renaissance, $223 billion has been raised in IPOs globally this year. That’s up from $109 billion last year and just $85 billion in 2008.

Photo: Tesla Roadster

Average Three Month Returns Last Updated:December 15, 2010 

Folio Inception 3 month 1 year
S&P 500 with Dividends 10.37% 13.75%
IPO Candy 7/28/2010 27.35% N/A
Internet 5 3/11/2001 20.82% 40.14%
Small-Cap Value 4/5/2000 18.57% 30.99%
Small-Cap Growth 4/5/2000 18.52% 24.8%
Small-Cap Blend 10/26/2000 17.71% 37.13%

Past performance is not a guarantee of future results.

One thought on “Tid Bit: IPOs’ High Speed

  1. Source Marketing Direct

    Good blog! I really love how it is simple on my eyes and the data are well written. I am wondering how I could be notified whenever a new post has been made. I have subscribed to your RSS which must do the trick! Have a nice day!

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