More than a month has passed since the rocky May 18 debut of social-network website, Facebook Inc (NASDAQ:FB). And in that time many offerings have been delayed or withdrawn. Facebook Inc (NASDAQ:FB)’s stock had slumped 32 percent from the IPO price, before staging a smart recovery to end 13 percent lower from its offering price on Friday. But this has done little to erase scars of many retail investors who have simply abandoned the equity market.
The coming week will see a quartet of new offerings hit the market, and if IPO-research firm Renaissance Capital is to be believed, investors could be in for a pleasant surprised. Lynn Cowan of The Wall Street Journal, has some interesting research on the topic.
According to Renaissance’s research, historically after a freeze in the market for initial public offerings, the first IPO to hit the market tends to produce decent returns. Since 2000, IPO’s that came to the market after a dry spell of around a month, have shown an average three-month return of 64 percent, against a 6 percent rise in the S&P 500 index during the same periods of time. So here is what is in store this week.
Natural gas and energy company EQT Corporation (NYSE:EQT) is the first deal scheduled for the week, which will be followed by engineering software maker Exa Corp., cloud-based computer-services provider, ServiceNow Inc. and finally will come cancer drug maker Tesaro Inc., EQT Corporation (NYSE:EQT), which has a price range of $19 to $21, is seeking to raise $263 million on the New York Stock Exchange under the symbol “EQT.” Exa wants to sell $81 million through a NASDAQ listing under the symbol “EXA”, and has set a price range of $11 to $13; ServiceNow is aiming for $198 million on the New York Stock Exchange as “NOW” at between $15 and $17 each, and Tesaro is planning to raise $90 million on the NASDAQ as “TSRO” within a price range of $12 to $15.
With its strong revenue growth and high customer retention, ServiceNow looks the strongest among the lot. While EQT Midstream Partners, which operates a 700-mile natural gas pipeline from the Appalachian basin, is expected to attract investors looking for generous dividend payouts. Interestingly, ServiceNow marks the return of Morgan Stanley (NYSE:MS) to the IPO market after it led Facebook Inc (NASDAQ:FB)’s controversial debut.
Market analysts will closely follow the developments this week, because if these deals succeed, the tide may finally begin to change in the market for initial public offerings, which has simply collapsed since the disastrous Facebook Inc (NASDAQ:FB) IPO.