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Vol. X,  Issue 17

IPO Market News:

High-Tech Stocks Get

Warm Reception from Investors

 4/23/12 – Rumors are swirling that Facebook is looking to complete its initial public offering prior to the Memorial Day weekend, and while it is a company whose shares will generate intense interest under any conditions, a May debut would come at a time when technology IPOs are in favor with investors. Among companies that went public between January 1, 2012 and April 16, 2012, seven of the top ten aftermarket performers are high-tech issuers. Technology industries also account for four of the six top performing SIC codes so far this year.

While they have performed particularly well, technology companies are not the only 2012 IPOs that have increased in value in the aftermarket. Of the 50 companies that have debuted this year, only 12 were trading below their offer price as of April 18^th’s market close. While only two have more than doubled in value (Guidewire Software and Annie’s), 28 of this year’s IPOs have enjoyed double-digit gains in aftermarket trading.

First Day Pricing – Investors have embraced high-tech offerings this year, pushing seven of them to gains of 30% or more on their first day of trading. Leading the way is online ratings platform provider Yelp, whose shares gained 63.9% by the end of their March 2^nd debut. E-commerce solutions provider Demandware also started quickly, climbing 47.4% on its first trading day.

Joining Yelp and Demandware among the year’s top ten first-day gainers through April 16^th are prepackaged software companies Bazaarvoice (+37.6%), ExactTarget (+32.2%) and Guidewire Software (+31.7%). Healthcare practice management systems provider Greenway Medical Technologies and Brightcove, a provider of cloud-based platforms for digital media, each enjoyed a 30% jump in share value on their initial trading days.

2012 Top Ten IPO First Day Pricing Gains

 (IPOs First Trading from 1/1/12 to 4/16/12)

IPO Vital Signs Subscribers see,

#290. IPO First Day Pricing Statistics.

Post First-Day Performance – Since posting a 31.7% gain in its January debut, Guidewire Software has continued to climb in aftermarket trading, and is the year’s top performing IPO through April 18^th. The company’s shares are up 124.2%, placing it just ahead of organic food producer Annie’s (+121.1%). Other than parts manufacturer Proto Labs and pharmaceutical developer ChemoCentryx, the rest of the top ten aftermarket performers are high-tech companies.

Software developer EPAM Systems has shown steady growth in its share price after gaining a comparatively modest 16.7% on its first trading day. Its shares are now up 68.2%, placing it fifth in the ranking of IPO aftermarket performers. Interestingly, ExactTarget has maintained its 32% first-day gain through April 18^th. While that percentage put the company among the top ten first-day performers, other tech stocks have surpassed it in subsequent trading. ExactTarget finds itself in 18^th place in the 2012 aftermarket rankings.

IPO Aftermarket Performance

 (IPOs First Trading from 1/1/12 to 4/16/12

 at Last Trade Date of 4/18/12)

IPO Vital Signs Subscribers see,

#299. IPO Aftermarket Performance by SIC Code.

SIC Code Class Performance – Taking a broader look at how IPO industries have performed, technology-related sectors comprise four of the top six SIC codes through April 18^th. When assessing performance based on the percentage of change in the value of a single IPO share, Food & Kindred Products (SIC 2000) and Miscellaneous Manufacturing Industries (SIC 3990) claim the top two spots on the strength of one deal each—Annie’s in SIC 2000 and Proto Labs in SIC 3990. These two SIC codes are followed up in the rankings by four computer services segments.

Six Prepackaged Software (SIC 7372) companies have completed IPOs in 2012, and the industry ranks fifth with an aggregate 53.6% gain in value per share. Performance among these six new issuers ranges from a 124.2% rise for Guidewire Software to a 8.3% drop by AVG Technologies N.V. The Netherlands-based internet security software provider has struggled from the very beginning. Its shares fell 18.8% in the company’s February 2^nd public market debut.

SIC 7370 (Services-Computer Programming, Data Processing, Etc.) is the only other industry in the top ten ranking with more than one completed offering. Yelp and Synacor have generated an aggregate 60.6% gain in aftermarket trading. Synacor, which provides online content delivery solutions, has seen its shares primarily climb after the first trading day. The company’s shares gained only 5% by the end of their first day, but are up 42.4% through April 18^th.

Facebook is the kind of marquis company whose IPO could succeed on name recognition alone. Nevertheless, the apparent willingness of investors to support high-tech stocks in the aftermarket bodes well for the company’s upcoming entry into the public market.

SIC Code Aftermarket Performance

Ranked by % Change of Value of One Share

(IPOs First Trading from 1/1/12 to 4/16/12

at Last Trade Date of 4/18/12)

IPO Vital Signs Subscribers see,

#298. IPO Aftermarket Performance

by SIC Code (Aggregated).

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