Bloomberg Anywhere Remote Login Bloomberg Terminal Demo Request


Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.


Financial Products

Enterprise Products


Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000


Industry Products

Media Services

Follow Us

Bloomberg Customers

Stock offerings take wing on NYSE Euronext

Posted by: Joe Weber on May 21

The dollar sizes are modest and there aren’t many of them, but initial public offerings and secondary stock offerings are showing a surprising bit of life. “I call it a streak in the first inning,” says Scott R. Cutler, an executive vice president at NYSE Euronext who runs the exchange company’s listing for the Americas.

Indeed, there have been some solid hits in the last few months culminating in the offering on May 20 for SolarWinds, an Austin (Texas)-based software provider. The outfit raised $151.5 million as it became the fifth domestic IPO to debut on the NYSE so far this year. Together, the five raised $1.4 billion.

Excited as traders are about this clutch of deals, they amount to a trickle compared with the recent offering high-water mark, set in 2007. Back then, some 256 U.S. offerings generated about $53.5 billion.

Nonetheless, the new deals seem like a torrent compared with a roughly eight-month stretch last year when virtually nothing was happening in the initial offering market. Before the spigot was switched off early last year, some 23 IPOs – 11 on the New York Stock Exchange and 12 on Nasdaq – raised $23 billion, officials at NYSE Euronext say. And if you take out an $18 billion springtime offering for Visa last year, the $1.4 billion dollar tally so far in 2009 compares well -- or at least is respectable.

NYSE Euronext executives compare today's offering environment to a more normal market than to the superheated periods of 2007 and a few years before. Companies bringing out new issues now are trading at discounts of about 25% to the prices of established rivals, in terms of price-earnings multiples, says executive vice president Cutler. He says that’s akin to the healthy markets of the 1990s.

Still, the market remains fairly narrow. Four of the five IPOs on the NYSE were for technology-related outfits. In addition to SolarWinds, the language-training program Rosetta Stone raised $129 million, while Bridgepoint Education brought in $163 million and DigitalGlobe collected $279.3 million. The biggest deal so far, raising $828 million, was for a different kind of animal, the Mead Johnson Nutrition baby-food maker.

The market is more robust for secondary offerings by established companies, but is likewise narrow, skewed heavily toward financial outfits. Wells Fargo, for instance, was able to raise $7.5 billion while Morgan Stanley collected $5 billion in their May 8 follow-on offerings. Banks, including Goldman Sachs, US Bancorp, Capital One Financial, BB&T Corp. and Bank of New York Mellon, were each able to raise between $1.2 billion and $5 billion in April and May.

In all, so far this year, some 96 secondary deals have raised about $54.4 billion on the NYSE, while 35 raised $4.2 billion on Nasdaq, exchange officials say. By comparison, 191 offerings last year on the NYSE brought in $179.5 billion, as 84 deals on Nasdaq yielded $9.1 billion.

The beginning of a trend? Hard to tell. Relatively few companies are waiting with registrations on the shelf and ready to go. “You haven’t seen a rush of new filings,” says Cutler. But he does call the new life in the market “the first shoots of spring.” Certainly, the stirrings could push some hesitating executives to look anew if they’d like to pump some new capital into their coffers.

TrackBack URL for this entry:

Thank you for your interest. This blog is no longer active.



BusinessWeek’s Joe Weber, Patricia O'Connell, Michelle Conlin, Frederik Balfour, Peter Coy, Greg Spielberg and Roger Crockett examine The Case for Optimism by looking past the financial turmoil and economic unrest gripping the globe to focus on the promising future that lies on the other side of this storm. We’ll chronicle the forward thinkers investing in R&D, launching promising new products, entering new markets, or implementing management and leadership.

See why BusinessWeek Editor-In-Chief Stephen J. Adler is optimistic about the economy amid the sharpest downturn since the Great Depression.

BW Mall - Sponsored Links

Buy a link now!