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Big-name IPOs could be snapped up quickly next week

WASHINGTON — In the world of new stock offerings, everything about next week is big: the number of deals, the amount of money expected to be raised and the profiles of the companies going public.

The action is likely to draw a wide range of investors into the U.S. stock market. If investors snap up stock of companies such as General Motors and casino operator Caesars Entertainment, that could win over skittish traders who have taken refuge in the relative safety of bonds.

Stock in the week's biggest deal, General Motors, already may be scarce. Investment bankers handling the GM sale have more orders than stock for both the 365 million common shares and 60 million preferred shares that will be sold next week, a person briefed on the sale said Friday.

If demand remains high, GM could price the stock at the high end, or above, of the $26 to $29 range it expects.

The market for initial public stock offerings has been heating up and providing good returns. The FTSE Renaissance Composite IPO index, which tracks the performance of stocks that had IPOs in the past two years, is up nearly 13 percent this year. By comparison, the broad Standard & Poor's 500 index has gained 9 percent in that period.

The General Motors IPO could change that, said Kathleen Smith, an IPO expert and founder of investment advisor Renaissance Capital. Most recent IPO investments have come from funds that specialize in initial public offerings of stocks, she said. After next week, Smith said, managers of smaller portfolios and nonspecialists are likely to take an interest.

"This is going to be a consciousness-raising IPO for a broader group of investors who have not been particularly interested in the IPO market," Smith said.

Besides GM and Caesars, next week's big IPOs include management consultant Booz Allen Hamilton, the massive broker-dealer LPL Investment Holdings and electronics maker Aeroflex Holding.

With 10 deals expected to come to market next week, it will be the most active period for IPOs since 2007, according to Renaissance data.

The offerings could raise about $12.5 billion. That's the biggest week since March 2008, when nearly $18 billion was raised through IPOs with Visa's deal raising $17.86 billion of that.

The IPO market has improved steadily since August 2009. The sector had been almost frozen for nearly a year after massive losses on mortgage bonds upended global credit markets.

A lot of companies have postponed plans to go public, leading to an enormous backlog. Many were delayed because the companies had unrealistically high expectations for what their offerings should fetch. If next week's deals take off, more of those companies will go public, analysts said.

"If (GM) does well next week," said John Fitzgibbon, founder of research firm, "well — it's like honey attracts flies."

.Fast facts

For sale

Top U.S. companies slated to issue initial public offerings next week, with a total projected IPO revenue estimated at $12.5 billion, which would be the biggest week for IPOs since March 2008.

General Motors, automaker

Caesars Entertainment, casino operator

Booz Allen Hamilton, management consultant

LPL Investment Holdings, broker-dealer

Aeroflex Holding, electronics maker

Big-name IPOs could be snapped up quickly next week 11/12/10 [Last modified: Monday, November 7, 2011 1:21pm]
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