Half of All 2011 IPOs Are Underwater
More than half of all initial public offerings in the U.S. this year are now trading below their offer price.
According to data tracker Dealogic, 63% of IPO listings in the country are “underwater”. Internet radio firm Pandora Media Inc. (NYSE:P), physicians’ hand-held software maker Epocrates Inc. (NASDAQ:EPOC), and Chinese social networking site Renren Inc. (NYSE:RENN) are all trading well below their IPO prices. Pandora is down over 40% since it debuted in June, Epocrates has declined 54% since February, and Renren has declined a whopping 62% since May.
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However, this year to date, IPOs have been performing better than stocks in general. IPOs were down 6.5% on average in 2011 as of close Tuesday, while the S&P 500 index was down 11.45%. Exactly half of 2011 IPOs are trading below the respective S&P 500 performance, which means the other half are trading at or above their initial offering prices.
Chinese Internet security software company Qihoo 360 Technology Co. Ltd. (NYSE:QIHU) closed Tuesday at $21.94, well above its $14.50 IPO price. Professional networking site LinkedIn (NYSE:LNKD) closed yesterday at $88.09 a share, nearly double its $45 IPO price. Real estate site Zillow (NASDAQ:Z) and Latin American McDonald’s (NYSE:MCD) franchiser Arcos Dorados Holdings Inc. (ARCO) both closed Tuesday above their offer prices and their highs on their first day of trading.
According to Dealogic, professional services IPOs are the best performers, driven by Nielsen Holdings N.V. (NYSE:NLSN), which is up 20.87% from its offer price, and Zillow, up 86.38% from its offer price.