Overview & Analysis: Page 6
Semiconductor IPOs ReignThe IPO market certainly changed hands many times during the year and by the close of business, the sector that yielded the most activity [by deal proceeds] was the energy marketplace. Spurned by the California energy crisis earlier in the year stocks in the Energy Industry raised $7.3 billion from 17 transactions. By year end, the average return for stocks in that sector lost 7.5%. That's despite the inclusion of Williams Energy Partners (ticker: WEG), one of the year's top performing stocks. Moving right along, the second most tested sector during the year was the insurance market. Six of the seven companies in our Banking and Finance sector are insurance companies. The majority of the proceeds can be attributed to the massive float from the demutualization of Prudential Financial. Thanks to strong returns from Prudential Financial and Willis Group Holdings (ticker: WSH), stocks in this sector recorded an aftermarket rise of 14.27%. "The IPO market pretty much follows the total equity market. When investors pull in their equity horns, the IPOs follow," added Morgenthau from Laidlaw Global Equities. "Those businesses that are good, sound businesses, which seem to have good management, and are priced sensibly will be given a shot by people." The sector that recorded the best aftermarket performance was Computer and Communication Products, including the semiconductor marketplace. Unlike prior year's, the semiconductor area felt the shocks of a declining market for technology stock offerings. Technology specialists were hit extremely hard and with the decreased amount of investment-banking work to do, layoffs were conducted at the Street's biggest tech underwriters such as Robertson Stephens and SG Cowen Securities. Despite the decreased work in that market, we still saw privy to 11 IPOs in this sector, raising $4.4 billion, of which Agere Systems accounted for $3.6 billion of those proceeds. Components of this sector notched a stellar return of 39.7%, easily outpacing all industry groups for 2001. The top performing stock for the group was Magma Design Automation(ticker: LAVA), a $63 million underwriting led by CS First Boston, with a gain of 132.2%. Dragging the group's return down was the sour performance of Multilink Technology (ticker: MTLC) with a loss of 28%. Issues in the consumer product area turned in the next best performance. Stocks in that group were up nearly 40%, on average. However, the one sector that tested the market the most times, as measured by the number of transactions, was the Healthcare & Biotech sector. According to our research, 25 IPOs were conducted in that area of the market, totaling $3.84 billion in proceeds. The average return by components in this sector of the IPO market posted gains of 17.7%, with Odyssey Healthcare (ticker: ODSY), an offering steered by Merrill Lynch as the top performer of the group. Dragging the sector's performance down was the near collapse of a Deutsche Banc Alex Brown managed IPO named Align Technology (ticker: ALGN). Shares of Align Technology, through Dec. 28, were off roughly 65%. Subsequent to the firm's IPO, stockholders filed class action lawsuits.
Copyright 1996-2000 IPO Monitor. All rights reserved. Redistribution or publication of this content is expressly prohibited without the prior written consent of IPO Monitor. This information is provided AS-IS, without any warranty of any kind. IPO Monitor makes no claims concerning the accuracy or validity of the information, and shall not be held liable for any errors, delays, omissions or use thereof. Please report problems with this site to: ipo-admin@ipomonitor.com |