Initial Public Offerings Make Comeback

Article excerpt

Initial public offerings, which withered after the Oct. 19 stock market crash, appear to be making a comeback, with several recent new issues being well received by investors.

According to IDD Information Services in New York, 94 common stock offerings were completed in the six months from November through April. This represents a drop of about 72 percent from the 340 initial offerings in the year-earlier period.

IDD, which tracks corporate financings, said the total value of the offerings in the latest six months was $9.9 billion, down more than a third from the $14.9 billion generated a year earlier.

``In the 1986-87 period, many deals were riding the wave of the bull market,'' said Craig B. Jampol, syndicate manager at Gruntal & Co., a New York-based brokerage firm active in the new-issues market. ``That wave has crested, and, since the crash, investment bankers and investors have become much more selective.''

Jampol points out that larger initial public offerings have been more prominent since the crash.

``This is not to say that smaller offerings have not been successful,'' he said, noting that a number of transactions valued at $10 million to $25 million have been completed.

``The IPO market is beginning to wake up, and most of the offerings we're looking at are very attractively priced,'' said Ronald B. Koenig, chairman of Ladenburg, Thalmann, a New Yorkbased investment firm. ``In fact, in terms of value, the IPO buyer is probably looking at the best deals to come down the pike in a long time.''

While some experts are bullish on initial offerings, others think it may not be possible to sustain the current level of interest.

Kenneth S. Hackel, president of Systematic Financial Management, an investment advisory firm in Fort Lee, N.J., said the current situation ``may only represent a temporary window of opportunity in an otherwise lackluster market for new issues.''

Despite this guarded view, there have been encouraging signs from several major initial offerings that have reached the market of late.

On Nov. 20, only a month after the market crash, a $210 million offering priced at $10 a share and led by First Boston was completed for the Borden Chemicals and Plastics Limited Partnership, which operates the chemical and polyvinyl chloride resins business of Borden Inc.

In a Jan. …