The 2010 IPO scene has sure been interesting. A stock market riddled with volatility, heavy selling action and fears of a double-dip recession doesn’t sound much like a favorable climate for initial public offerings. But don’t tell that to the 171 companies that have filed to go public with IPOs in 2010.
In fact, the plethora of companies with IPO plans makes 2010 the busiest year for public stock offerings since 2007 — and we still have more than four months left in the year. By comparison, there were just 120 IPO filings in 2009 and 153 in 2008.
The biggest new public offering of the year isn’t really a new company. In fact, the company has been around for over a century. Of course, we’re talking about General Motors, which this month announced its plans to go public sometime this fall with what will likely be the biggest IPO since the Visa, Inc. (NYSE: V) near $20 billion initial public offering in March 2008. Analysts think the General Motor’s IPO will raise about $20 billion, but the precise amount will be contingent on the investing public’s appetite for this “too big to fail” ward of the state.
While GM has received a lot of attention for its IPO, there are plenty of other companies quietly rejoicing in the fact that they’ve gone public. The three biggest winners so far in the 2010 IPO follies are HiSoft Tech Intl. (NASDAQ: HSFT). The IT outsourcing firm started trading on June 29 with an offer price of $10, and has since risen to $19 for a +90% return. Solar supplier JinkoSolar Holding (NYSE: JKS) began trading on May 13 with an offer price of $11. Since then the stock has more than doubled to $24.01, for a +118% return. The top IPO winner so far this year is online travel company MakeMyTrip Ltd. (NASDAQ: MMYT), which began trading on August 11 with an offer price of $14. The stock now trades at $33.63 for a return of +140%.
Of course, it hasn’t all been rosy for companies going public this year. The three biggest IPO losers so far in 2010 are seismic data firm Global Geophysical Services (NYSE: GGS), which went public on April 22 at an offer price of $12. The stock now trades at $6.30 for a decline of -47%. Next is medical homecare product maker Dehaier Medical Systems Ltd. (NASDAQ: DHRM). The stock began trading on April 21 at $8, but currently it trades at $3.64. That’s a decline of -55%. The biggest loser so far this year is China
Hydroelectric Corp. (NYSE: CHC). The Chinese power generation firm went public on January 25 at an offer price of $16. And at its current price of $6.07, investors now are staring at a -62% loss.
One of the highest-profile companies to go public this year is electric car maker Tesla Motors Inc. (NASDAQ: TSLA). The stock’s offer price on June 29 of $17 rose to $19 at the open, and by day’s end the shares had climbed to $23.89 for a one-day advance of nearly 41%. Tesla was the first American car company to go public in over a half a century, and though the shares have pulled well off their highs, Tesla still is one of 2010’s biggest IPO successes.
Hoping to attain the same type of IPO glory as Tesla are two other well-known, high-tech fashionable companies—social networking site Facebook, and Internet-telephony firm Skype. Both of these firms have their sights set on joining the IPO party relatively soon. This month Skype filed its initial paperwork with the S.E.C. to go public, and though no official date or offer price has been announced yet, the deal is suspected to garner a whole lot of attention from investors. However, it’s worth noting that some think tech giant Cisco (NASDAQ: CSCO) may preempt the Skype IPO with a buyout offer.
As for Facebook, the social-networking company probably won’t go public in 2010. In fact, it may not be until 2012 that its shares actually begin trading. However, the positive IPO chatter ringing through the market this year has already caused a buzz about a proposed Facebook deal. In fact, there’s been a recent surge of people buying shares of the company in the secondary market—and that has reportedly driven the stock price up to $76.
The takeaway here from the IPO scene in 2010 is that despite the headwinds facing the market and the economy, companies still are eager to go public to raise the capital needed to get to the next level. That’s a positive sign for both the economy and the stock market as we forge on into the final third of the year.
As of this writing, Jim Woods did not own a position in any of the stocks named here.
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