Assessing the IPO Class of 2005

by: TickerSense

The final results for the IPO class of 2005 are in and the results were nothing to write home about. Over the course of the year there were 243 initial public offerings (roughly one per day) which is on the high side versus the average over the last eight years:

But while the amount of IPOs was higher than average, the money raised was lousy. Less money was raised this year than any year dating back to at least 1998 (and that isn't even on an inflation adjusted basis).

On a performance basis, this year's class was in the middle of the pack vs. prior years, with an average gain of 5.5% from the first trade through the end of the year.

While everyone remembers the standout performance of BIDU (86% return from open to close on first day of trading, and then a decline of 51% from its close on day one through the end of the year), it doesn't make the list of top ten winners or losers. Retailer Cititrends (NASDAQ:CTRN) was the year's biggest winner with a gain of 150%+, while Refco (RFXCQ) topped the list of losers after it filed for bankruptcy within months of its initial offering.

On a positive note, we would point out that while many market skeptics have claimed that the market is acting a bit frothy, we see no signals of froth in the IPO market.