VideoOn the other hand, it has the kind of growth potential that attracts investors to the IPO market. Sales of the company's diagnostic cardiovascular tests tripled last year to $18.5 million from $6.2 million in 2000, and more than doubled in the first six months of this year, to $14.1 million.
If the offering, led by Merrill Lynch, goes well, it will no doubt pick up the spirits of managers at several other companies that may go public soon. That list includes Steve Wynn's Wynn Resorts, the Chicago Mercantile Exchange, and St. Paul Cos' reinsurance unit Platinum Underwriters Holdings.
It also would probably raise the spirits of investment bankers who work on new issues, many whom have had precious little work this year.
So far, just 59 companies have gone public in 2002, raising a mere $21.18 billion. That's down about one-third from the $31.9 billion raised at this point last year, when 64 companies went public, according to Dealogic LLC.
This sets up the market to come in well below last year's poor performance, when just 87 companies went public, raising about $46 billion.
During the peak years of 1999 and 2000, more than $100 billion was raised in each of the two years.
Here are the totals going back to 1990:
2002 (year to date): 59 IPOs, $21.18 billion raised
2001: 97, $46.03 billion
2000: 442, $108.49 billion
1999: 541, $101.5 billion
1998: 381, $53.12 billion
1997: 634, $77.04 billion
1996: 876, $78.21 billion
1995: 597, $50.95 billion
1994: 624, $41.23 billion
1993: 732, $54.21 billion
1992: 535, $29.27 billion
1991: 331, $16.95 billion
1990: 154, $5.29 billion
The (Maybe) Strengthening Consumer
Is the American consumer going to lead the economy out of the wilderness?
This is a critical question, given that consumer spending accounts for two-thirds of the U.S. economy.
On Friday several sets of statistics were released that seemingly indicate that the domestic economy might have started to rebound.
Retail sales, for example, rose for a third straight month in August.
What's more, consumers may be in better position to spend money in the future. For the fourth straight month, fewer credit cardholders fell behind in their payments, according to Moody's. In addition, credit card issuers wrote off fewer account balances as uncorrectable, the second time this year losses fell compared to year-earlier levels.
"Shortly after the recession in 1991, and again in late 1997, both the chargeoff and the delinquency rates moved in the same direction, as the improvement in the delinquency rate was later followed by an improvement in the chargeoff rate," notes William Black, vice president at Moody's.
And mortgage rates continued to drift to their lowest levels in decades, enabling more and more Americans to refinance their mortgages and plow some of the equity into furniture, cars or and other for-sale items.
One stat for concern, however: Initial jobless claims rose last week to 426,000, the highest in almost five months. That means some companies are still firing workers, many while others are not replacing those that were laid off earlier.
Short Takes: Junk Up, Reliant Down, Euro-paper Off
- The junk bond market recovery slowly continued last week. Junk bond mutual funds added a net $186.6 million of assets, the third straight week of net inflows, according to AMG Data Services.
- Standard & Poor's on Friday downgraded Reliant Resources Inc. to junk status.
- The proportion of companies based outside the eurozone that issued euro-denominated paper plummeted during July, to just 2.8 percent from 10 percent on average for the past 12 months, according to Moody's. Much of the decline was driven by a decrease in issuance from the U.S. Canada and Latin America. The reason: The interest rate differential between euro-denominated and euro-dollar bonds has narrowed from a peak of 80 basis points at the end of March for A-rated bonds to just 25 basis points by the end of July. "Moreover, this differential narrowed even further during August, finishing the month at around eight basis points," Moody's added.
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