The big banks are enjoying a good week for IPOs, as almost all of them were involved with two ocean shipping companies – Baltic Trading and Crude Carriers, and also health sciences company Aveo Pharmaceuticals, Bank of America (NYSE:BAC) and Wells Fargo Corp. (NYSE:WFC), JPMorgan Chase & Co. (NYSE:JPM) and Morgan Stanley (NYSE:MS) all partook in the management of the deals for one or the other.
Cruder Carriers just went public, while Baltic Trading went public earlier this week. But the idea they felt it was a good time to take the chance may be a good sign for the giant financial institutions to generate some significant revenue and profits if other companies continue to follow in their footsteps.
One thing everyone is watching are so far the IPOs this week aren’t performing that strongly, and have pulled back or barely broke even, depending on when you check up on their share price. That could have a negative impact on other IPOs if they continue to perform in lackluster ways. That would indicate the market isn’t quite ready to take on new business, and aren’t convinced the economy has turned around in a manner which can sustain going public at this time.
The same will probably be true of Aveo, as a pharmaceutical is always cyclical and branding them takes a long time.
Taking into consideration other recent initial public offerings, and you don’t get a lot to rejoice about if you’re the big banks, but there does seem to be more consistency in the business, and the market has pretty much factored in the poor economic conditions, which the share prices of the new offerings, for the most part, all reflect.
If those going public understand this, they should continue to undertake the process for the benefit of all those involved.
Managing the Crude Carriers IPO was Bank of America and Wells Fargo Corp and UBS, while JPMorgan Chase & Co. and Morgan Stanley handled the Aveo IPO.
