Yesterday Was Not A Good Day To Go Public

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It was, however, a pretty good day to get in on the ground floor.

All five IPOs that priced on Wednesday had to slash their valuations in order to complete their offerings, as last week’s sell-off and concerns over market volatility forced companies to offer shares below their original ranges. Wednesday had the most IPOs price below their original range in a single day since June 9, 1998, when five of seven deals priced below their range. However, unlike the five June 9, 1998 deals, which showed lackluster returns across the board in their first day of trading (average loss of 2%), four of the five deals that cut their valuations on Wednesday produced positive returns (average gain of 5%) in their first day of trading…. Despite the strong returns, none of the companies that priced on Wednesday have traded up to their original ranges, indicating that, even with the market’s rebound this week, investors are still turned off by the original valuations proposed by these companies.

All five IPOs price below original range on Wednesday, most in one day since June 1998 [Renaissance Capital]

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