After a recession, are investors ready for new IPOs and the exchange traded fund (ETF) that holds them? We’re about to find out as two companies go public.According to Tim Mullaney for Bloomberg:

  • SolarWinds, which makes network-management software, not renewable energy, plans to raise as much as $139.3 million with 12.1 million shares.
  • Open Table, a restaurant reservation site, aims to raise up to $42 million with 3 million shares. (Here’s 10 things to know about them ahead of the launch).

The IPO market has until recently been relatively quiet, as the desire for themdried up with the market crash.

These companies will have to convince the public and investors that they are going to maintain fast growth and be able to continue on this trend. Many are watching the performance of OpenTable, as the success of this company will indicate the IPO market is comfortable for other smaller start-ups.

The First Trust IPOX-100 Index (FPX) tracks an index of 100 top IPOs in the United States, measuring the performance of them by their market cap and rebalancing quarterly. They’re added into the index on their seventh day of trading in order to capitalize on a long-term “buy-and-hold” perspective. On their 1,000th day, it’s time to move on and the once hot new things are bumped out of the index in favor of a new IPO.

  • First Trust IPOX-100 Index (FPX) up 8.7% year-to-date; Visa 9.76%; Phillip Morris International 8.94%; MasterCard Incorp. 6.95%.

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.