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Where Are The IPOs? at Trader’s Narrative




Where Are The IPOs?


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No, really. When was the last time you saw an IPO in the wild? or in captivity?

According to the Standard & Poor’s it has been almost 3 months since we had an IPO. Unless I’m mistaken, that would be Rackspace (RAX) a internet hosting company which has seen its share fall almost 60% (from the offer price of $12.50).

This is nearly as bad as things got in early 2003. You remember that dark hour in market history, don’t you?

But the IPO freeze isn’t limited to the US. Over in Europe the same thing has taken hold. Not only are IPOs completely on hold, but any financial dealing, including mergers, acquisitions, buybacks, etc. are similarly shelved. This can’t be good news for financial firms who are grappling with the most intense crisis we’ve ever seen. It is as if all the taps were turned off instantly.

Or for their employees. Time to brush up on the resume or gasp, consider grad school :)

Usually a dry period in IPOs is bullish because it indicates that prices are too cheap. But right now we are not seeing a normal cyclical turn of the markets. This is very unusual because if it were a matter of stocks being cheap, so many firms would not be canceling buybacks as well. Obviously things are so bad everyone is getting in a fetal position and hoarding cash.

Either this is extremely bullish or the momentary suspension in the air before we plunge to zero. Your pick.

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3 Responses to “Where Are The IPOs?”  

  1. 1 worldtrader

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    Besides sentiment indicators, have you got an all clear indicator that is solid? My suggestion is that bottom calling sentiment and other like indicators don’t nearly work as well for risk adjusted market timing than an all-clear indicator. Everything else is about gambling and courage.

    In other words, IPO’s and every other indicator that you can show right now can be either very early, late or just a flip of a coin. The far better tool is one that gets you in at the point of inflection when the risks are lower, yet you get the headwinds to your back.

  2. 2 Bill K

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    I think Worldtrader is right. We really need a fool proof crystal ball. Forget all of this analysis stuff, I am over that. We need something simple and easy. I am going to see if I can get into a Disney movie and find a crystal ball to predict the future. I will be rich!!

  3. 3 Babak

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    Bill K, lol, the trick is getting back into our world once you’re in the movie!

    worldtrader,
    I think you mean something like the Coppock guide. But to be fair, nothing is full proof. All we have are different ways to look at things and to use history as a measuring stick of some sort.

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