IPO info. A repost from SI... -- EFNT2

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Date Posted: 15:18:44 08/12/00 Sat
Author: warren
Subject: IPO info. A repost from SI...

To: SirRealist who started this subject

From: bsim17 Saturday, Aug 12, 2000 4:08 PM ET
Reply # of 8159

READ THIS:
Well as noneed pointed out, with the IPO glut there is really no need to dig into any IPO's in QP and dissect them....because they're not going to get noticed anyway. So, I thought I'd spend a little bit of time looking back on the year thus far. I looked at each and every IPO this year, broke them down into the month they debuted and detrmined whether either 50% or 100% could have been made on each one had it been played perfectly from bottom to top. Now admittedly it's nearly impossible to play any stock perfectly, which is why I set the bar so high at 50% and 100% return...Even if you played a 100% gainer very imperfectly and bought above the low and sold well before the high, there still is a good chance you made some nice money on it. The following is a monthly breakdown, a bit of analysis, and a few IPO's that have done well since their QP whether or not they did anything in it.

2 rules I used:

1) I did not use the bottom listed on Day 1. We've all watched IPO's that opened at 41, yet inexplicably the low of the day is listed at 35. So I assumed 15% or so off the listed bottom price of day as the best price you could have bought that day.

2) I did the same for April 4. That was the big drop day and there was no way anyone could have bought ALL the IPO's that set lows that day. I know dry picked up PSIT at $10 as did I(of course I was still holding a bunch from much higher too!), but there was no way either of us could have bought ALL of the IPO's that set lows at pretty much the same exact time.

Warning: The following does NOT take into account all the money you could have lost trading these things as there are many that put in 50% gains that also lost 50% in QP as well. But Im not an investor, and simply use these as a trading vehicle, so I do not(other than 4/4) ride any of the QP's down more than 5-10%. If I'm 10% down on one, it's time to start lightening up for me. So these are risky as #### as there is often tons of downside as well as the upside. I'll make a few comments on particularly dangerous downside times in the monthly section.

JANUARY/FEBRUARY.
# of IPO's: 70
46% of those were 50%+ QP gainers
17% were 100%+ QP gainers.

Comments: boom time. Lots of IPO's, most opened high and kept going higher. Looking back now I'm shocked at the sheer volume of junk that was unleashed during this period. B2B leftovers, the B2C dregs, fiber cable layers, and bios dominated the slate. End of February was a particularly junk filled time. If one had bought most of these in their QP and held on to them until now, they'd be one hurting puppy. I've never seen a larger group of single digit stocks in my life than this group currently. Of the 70, only a few have gone on to do well after the bubble in which they emerged: DCEL/DTHK/QEDI/TSTN and surprisingly ROOM have performed well in the post QP world. In retrospect this was the sign that the market had gotten way out of control. Still with a 46% rate of 50+ plus gainers, it was hard to miss playing the QP game. Either buying the high fliers out the door or playing the "v" worked extremely well here.

MARCH
# of IPO's: 63
38% were 50%+ QP gainers if played perfectly
5% were 100%+ gainers.

The tale of two months here....The beginning of the month continued the February trend of opening high and going higher, selling off and ramping again...But the market changed as we all know. The statistics on this month are very, very deceiving as in this crop are some of the hardest falls I've seen in IPO's this year, outside of the July group(surprise!)....The 100% gainers dried up and nearly all the 50% gainers had equal or greater drops. To play this group one needed to be nimble, cut losses and not get greedy. February's boom lulled a lot of people and many got caught holding this group thru the crash....EPRS/IMPV/FAIM were all 50%+ gainers but also 100%+ losers if you weren't careful. This group gets a big asterisk - I was fortunate in that I actually made money off of this group.....again I can't urge anyone that plays the QP game strong enough to cut your losses at 10% if possible. Just look at the March IPO's if you don't believe me....and the July IPO's for that matter too - but we'll get to that. Still, good money to be made here. It was possible! The list of after QP performers from this period is dominated by bio's: LMNX/ACLS/SLC plus INSN and BRZE. A tough month, but one that proved the strength of the QP game.

APRIL
# of IPO's: 36
53% were 50%+ gainers
22% were 100%+ gainers in QP

The sky was falling, plenty got burned by the March IPO crop and no one wanted to touch these things.....Yet, it was a strong group that was able to make it out and they performed. Little downside with this group because most opened reasonable and didn't dip like the March group....and the 50/100+ gainers bested the Jan/Feb bubble - it's what I've been saying for months. These were the times to play them because the openings made valuation sense, the companies were for the most part solid, and they appreciated. Many IPO players were gone, our little board was really quiet, yet a few of us soldiered on. April was one of my best months ever. The list of after QP performers is a sweet one including NUAN/BKHM/KREM/CCMP/MET/SGMO/DDIC/TNOX/ULCM/EMBT/EXEL/PBSC/MTWV

MAY
# of IPO's: 24
67% were 50%+ QP gainers
27% were 100%+ QP gainers.

The Nasdaq was headed to 2,500 remember? No one wanted to be in the market, no one wanted IPO's, no one was issuing offerings..........except for the very strong companies or the stuff that was going to go bankrupt if they didn't come public. The only reason they all aren't 50%+ gainers is because a few POS's slipped out the door this month due to their cah flow desperation. Otherwise it was one of the strongest per capita IPO groups ever. There was so little downside to buying any of these in the aftermarket because they came out so cheap because nobody wanted them.....fear was everywhere. and it was the best month ever to be in the IPO QP game.Fish in a barrel. There is a lesson here - We aren't going to see the February bubble again, so my friends play the IPO's when they aren't bringing any out and no one wants them....just like May. Other wise play the volatility like March and June, but just don't play the glut of July/August as we shall see. May was beautiful. The steller offerings that have performed well since QP include: ORCH/NUFO/NRG/PXLW/CTLM/SONS/SMDI.

JUNE
# of offerings: 38....17 of which were in the final week.
47% were 50%+ gainers
13% were 100%+ gainers.

A tougher month....the first 2/3's of the month there were hardly any offerings, allowing the May group to have all the attention to themselves and this is the month the May group ran. The June group is pretty much two different ones. The final week of the month saw the IPO window open again as people noticed the gains from the May group and were willing to buy IPO's again - so we started to see a bit more speculation come in and openings started creeping up. This month's group is kind of a bridge between the few great offerings of April/May and the deluge to come. Still the IPO game worked well here and one was better off being patient and waiting for the inevitable dip to enter most of these. After QP performers are few as the market was opening these high or the QP players were pushing them up near the end of QP.....List includes really only 3 and they are all NYSE offerings: CYH/CRL/MBT. Again, the June group seperated two very different IPO climates.

JULY
Well only the first few weeks worth have made it to the end of QP, so I'll just look at those. You'll have to trust me though when I say the statistics for these are pretty much what I'm seeing for the rest of the July group as well.

# of offerings out of QP: 24
8% were 50%+ QP gainers
No 100% QP gainers.

Surprise surprise.....the July group is shaping up to be the worst performing QP group of the year by far...not even close. Why? 2 things
1) Speculation returned and many IPO's were opening higher than they had a right to open. AIRN for one...there are many, many others.

2) the glut hit. Late July thru mid-August has seen an absurd amount of IPO's hitting the market. There is only so much money to go around, not to mention time and energy trying to figure out which are solid companies and which are junk.

Simply, there isn't enough IPO capital and speculative money to handle the number of recent IPO's.....The July group has gotten killed for those two reasons. The masses(the sheep) are always the last to know and they finally all piled back into the IPO's in July and had the rug pulled out from under them.....yet again.

We're already seeing a lessening of IPO fever again....Most of the offerings last week performed poorly. There is still way too much supply out there though and I fully expect the entire July crop to remain the worst performing IPO group of the year....by far. The August group should end up being a bit better even with the huge supply, simply because so many of them are so beaten up a few of them are going to rally up a bit....Just a few though.

We'll look back in January and July/August will end up being the 2 worst performing IPO groups of the year I think....I can't wait for September!

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