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SEC Sees Most 1-Day IPO Filings in 6 Yrs.

Monday May 15, 6:29 pm ET

10 Companies File Initial Public Offerings on Friday; Surge Marks Busiest Day for SEC in 6 Years

WASHINGTON (AP) -- Friday marked the highest daily number of initial public offerings filed with the Securities and Exchange Commission in six years, with 10 companies registering to sell their stocks on the U.S. markets.

From investment bank Evercore Partners Inc. to Internet domain name registrar Go Daddy Group Inc., the new filings began at 6 a.m. and continued well past the market's close, with half of them arriving after the closing bell. None has finalized the number of shares they intend to sell or the price range for the deals, so the debuts of the stocks will likely be about three months from now.

"People have been asking, with the market as high as it is, why aren't there more companies rushing to go public? Well, apparently there are now," said Ben Holmes, publisher of, a research firm that tracks stock issuance.

For the past 12 months, the average number of IPOs filed with the SEC has been 1.3 per day, according to deal tracker Dealogic. Dealogic shows the last time more than 10 were filed in a single day was in March 2000 -- just as the tech stock bubble was about to burst -- when 11 deals were registered in one day.

Friday was the end of an especially active week for IPO filings. There were 19 deals total, making it the busiest week for IPO registrations since May 2004, says Dealogic. Investment bankers say the uptick in filings could point the way to a busy third and fourth quarter for IPO debuts, as bankers and their clients remain upbeat about the prospects of good valuations on deals.

This is usually the worst sign you can have that a bear market/crash/downturn is on its way with the market. In The Intelligent Investor with Jason Zweig's updated commentary, he notes that before the major bear markets IPOs were at all-time highs and outrageous amounts. If this IPO amount keeps up, I am not going to add any more money to stocks, because it is one fact (Not luck, a fact) that you can use with the market. High IPO amounts have been an indicator that the market is showing a great opportunity, thus companies want to get into the rush and make extra cash. Historically, when IPO amounts are at their lows (Usually toward the end of a large bear markets), it is the time to invest in the market.

Here is an intersting paper showing IPOs (Non ADRs, with opening prices of more than $5.00 and proceeds of more than $5M) that doubled on their first day of trading:

Here is some data from this report:
|Mean First-day Return |Aggregate Amount
Number | Equal- Proceeds- | Left on the Aggregate
Year of IPOs |Weighted weighted | Table Proceeds

| |
1990 104 | 10.8% 8.1% |$0.33 billion $4.08 billion
1991 273 | 12.1% 11.2% |$1.38 billion $12.28 billion
1992 385 | 10.2% 8.1% |$1.71 billion $20.97 billion
1993 483 | 12.8% 11.4% |$3.20 billion $28.16 billion
1994 387 | 9.8% 8.5% |$1.39 billion $16.24 billion
1995 432 | 21.5% 17.8% |$4.34 billion $24.46 billion
1996 621 | 16.7% 16.1% |$6.53 billion $40.65 billion
1997 432 | 13.9% 14.7% |$4.27 billion $28.97 billion
1998 267 | 22.3% 15.5% |$4.98 billion $32.20 billion
1999 457 | 71.7% 56.8% |$35.63 billion $62.69 billion
2000 346 | 56.1% 44.2% |$26.77 billion $60.54 billion
2001 76 | 14.4% 8.9% |$2.97 billion $33.97 billion
2002 67 | 8.9% 5.1% |$1.13 billion $22.11 billion
2003 62 | 12.1% 10.5% |$1.01 billion $9.58 billion
2004 179 | 12.1% 12.1% |$3.88 billion $32.04 billion
2005 162 | 10.0% 9.3% |$2.65 billion $28.37 billion
'90-'00 4,733 | 22.9% 22.4% |102.17 billion $457.3 billion

Another intersting IPO paper:

We'll see how the IPO market turns out this year, I think if we see numbers get up to 200 it should be viewed as a bad time to be invested in the market.


David K
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