Capital Markets

IPOs Surged in January

Another 20 deals are on the calendar this month.
Stephen TaubFebruary 8, 2005

Last month was the best January for initial public offerings since 2000, according to The Wall Street Journal, which cited data from Thomson Financial. Ten companies raised $2.12 billion last month, compared with six IPOs in January 2004.

January 2000, which saw 18 IPOs, was the most recent high point for the first month of the year. The Journal pointed out, however, that from 1992 to 2000, the first month of the year featured between 18 and 46 offerings each year, far above this year’s January total.

Nonetheless, the resurgent stock market has whetted the appetites of risk-taking investors and the management of fledgling private companies.

Richard Peterson, Thomson Financial’s chief market strategist, told the Journal that 20 deals are on the calendar for February — the same total as in 2004, although Peterson added, “I expect this year’s levels could go higher.”

Seven companies began trading last week, reported the paper, although four priced their IPOs below their initially anticipated range. They include three biotechnology or biopharmaceutical companies — Threshold Pharmaceuticals Inc., Favrille Inc., and Icagen Inc. — as well as document-management company American Reprographics Co.

This week IPO watchers expect 15 new issues.

The largest will come from Salt Lake City-based chemical maker Huntsman Corp., which plans to offer about 51 million common shares at $21 to $23 each and an additional 5 million preferred shares at $50 each, according to The Salt Lake Tribune.

To underscore the pragmatism behind the offering: In its filing, Huntsman stated that it plans to use most of the proceeds from the offering to cut debt, which carries interest rates ranging from 11.6 percent to 15 percent.