More private firms are selling shares while the initial public offerings market has perked up lately. Investors who don’t want to pick out individual companies may choose the IPO exchange traded fund (ETF)
After its first day in the stock market, Zipcar (NasdaqGS: ZIP) closed at $28, rising $10, up 56%, in its first day of trading, reports Shawn Langlois for MarketWatch.
Zipcar is just one of many new companies going public this year. Hoover’s Inc. states that 28 companies went public in the first quarter alone, bringing in $12 billion in market capitalization, which was more than two times the $4.5 billion raised by IPOs in the first quarter of last year.
McDonald’s franchisee Arcos Dorados of Argentina and Box Ships also held IPOs this week.
Matt Therian of the research firm Renaissance Capital commented that “if investors perceive a company as a game changer, they don’t worry so much about a valuation that might look expensive one or two years down the road.”
For more information on initial public offerings, visit our IPOs category.
- First Trust IPOX-100 Index Fund (NYSEArca: FPX). The FPX tracks an index of the 100 top IPOs in the United States, measuring their performance by market cap. The fund rebalances quarterly. IPOs are added in on their seventh day of trading, to capitalize on a long-term “buy and hold” perspective. On their 1,000th day, they’re shuffled out and new stocks are added. [ETF Waiting for IPOs.]
Max Chen contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.