The IPO market stumbled through August like a punch-drunk prizefighter. But it came out a winner in the end.
In August, eight IPOs were priced -- double the volume of the same month a year ago. Only four IPOs were priced in August 2011, according to U.S. Securities and Exchange Commission filings.
Now here's where this year's IPO market starts being compared to "One Round," "Canvasback" or whatever name the punch-drunk fighter has acquired. Five of August's eight deals were reduced in size to get them out the door. That is generally not a good sign. It shows a lack of investor interest.
Nonetheless, seven of August's eight IPOs have done well in the aftermarket.
On August 7, Bloomin' Brands priced its IPO of 16 million shares at $11 each to raise $176 million. That was down 45.2 percent from the $321.4 million that the company had planned to raise. Those plans called for an offering of 21.4 million shares priced at $13 to $15 each. The final pricing worked for investors. The IPO closed on Friday, August 17 at $13.06, up 18.7 percent from its offering price.
On August 9, Manchester United priced its IPO of 16.7 million shares at $14 each to raise $233.3 million. That was down 30 percent from the $333.3 million that the company had planned to raise. Those plans called for an offering of 16.7 million shares at $16 to $20 each. The final pricing did not work for investors. The IPO closed on Friday, Aug. 17, at $13.42, down 4.14 percent from its offering price. It was the month's only loser.
The month's final IPO was priced on August 15.
Hi-Crush Partners LP (NYSE:HCLP) priced its IPO of 11.25 million shares at $17 each to raise $191.3 million. That was down 19 percent from the $236.3 million that the company had planned to raise. Those plans called for an offering of 11.25 million shares at $19 to $21 each. The final pricing worked for investors. The IPO closed on Friday, Aug. 17, at $19.49, up 14.7 percent from its offering price.
August 2012 Scorecard
As of Friday's close, seven of August's eight IPOs had finished in the winner's circle, and one was a loser. The average gain for all eight was 12.47 percent. That was about 2.7 times better than the underlying stock market. The Nasdaq Composite Index closed on Friday at 3,076.59, up 4.66 percent from 2,939.52 on July 31.
That's the good news.
The sad news is the calendar has produced its last IPO for the summer of 2012. We'll have to wait until after Labor Day for more action.
Disclosure: Neither the author nor anyone else on the IPOScoop.com staff has a position in any stocks mentioned, nor do they trade or invest in IPOs. The author and IPOScoop.com staff do not issue advice, recommendations or opinions.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.