After First Data priced below expectations and Albertsons delayed its deal altogether, there are new concerns about the health of the IPO market. Bobbi Rebell reports.
The IPO market isn't getting a lot of love from investors. First Data, the largest initial public offering this year, priced below its expected range. The stock rose just slightly from its offering price of $16 a share when the payment processor started trading on the New York Stock Exchange. First Data President Guy Chiarello: SOUNDBITE: GUY CHIARELLO, PRESIDENT, FIRST DATA (ENGLISH) SAYING: "The stock opened very well, but, for the most part, we are in this for the long term. It wasn't really about the stock opening. It was getting out in a very difficult market in a successful way, and, I think, we accomplished that today." Grocery chain Albertsons didn't even make it to market. It was on tap for Thursday as well. The deal postponed after a disappointing earnings forecast from rival Wal-Mart raised concerns about investor appetite. Also recently delayed: retailer Neiman Marcus. To get deals done, companies have had to discount them to attract cautious investors. But based on the results, investors are doing ok. Kathleen Smith, Principal, at Renaissance Capital, a manager of IPO-focused ETFs, points to deals done in the last 12 months saying: "The good news for investors is that these deals are now trading up +16% on average, including those that dropped on the first day." Still, the precarious environment is expected to deter more IPO hopefuls in the short term, and Smith expects the number of IPOs to fall from last year. The next big test: Italian luxury carmaker Ferrari. That deal expected to be valued next week at close to $10 billion. And later on, First Data rival Square also looking to make its debut.