New kids on the block: IPOs grab Wall Street’s attention

IPOs are hot!

After a somewhat lackluster first half of the year, new stock offerings are creating a big buzz on Wall Street.

This past week Fitbit (FIT) blew the doors off with an initial stock sale that was the biggest tech IPO of 2015, with shares going for more than the wearable device company’s already increased price range. Then it followed it up with a boffo first day of trading, which carried over to a second-straight session.

Immediately on the heels of Fitbit, upscale Brazilian steakhouse chain Fogo de Chao (FOGO) also topped predictions with its IPO and shares spiked in their debut.

And according to Yahoo Finance Editor-in-Chief Andy Serwer, the hits will just keep on coming.

“I was talking to someone from the New York Stock Exchange last night and they said they were gearing up for next week,” he says. “They’ve got 10 IPOs on the Big Board, seven on the Nasdaq.”

Yahoo Finance Senior Columnist Michael Santoli thinks there’s a good reason for the recent surge in IPOs.

“We’re getting them in before the summer lull, he explains. “And I do think there’s an appetite for new corporate stories and new names out there to get into a portfolio that’s not in your benchmark, maybe you can get some performance out of it because it’s really been hard to come by for active stock pickers.”

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Santoli adds that while some have noted the 2015 IPO market is a bit sluggish when compared to last year, we have to remember 2014 was the biggest year for companies going public since the dot-com era.

“For volume the difference between this year and last year was Alibaba (BABA)-- tremendous, the biggest in history,” he notes. “We also didn’t get a lot of these former LBOs, big companies like Hilton (HLT) and Michaels (MIK). So it’s a little bit of the mechanics of the market, not necessarily this year is falling off.”

And Serwer reminds us there’s still time for 2015 to pick up the slack.

“There are dozens and dozens of companies still in the pipeline,” he says. “Not a lot of familiar names, but that’s not necessarily a bad thing. And there are still some white whales out there, like Uber.”

Yahoo Finance’s Lauren Lyster points out one reason 2015 has seen fewer public offerings is that firms such as Uber apparently haven’t felt the need to hit Wall Street yet.

“Some of these big tech companies have been able to raise money privately as opposed to going public,” she notes.

But Santoli indicates that won’t last forever.

“At some point, you’re almost going to have to. You get to a certain size you’re going to have a large number of private investors, if it gets above a certain amount you have to effectively file as if you are a public company anyway,” he explains. "That’s what happened to Facebook (FB). Facebook didn’t want to go public. They had to.”

But before anyone gets too pumped up for more IPOs, Serwer has a warning.

"The bankers are busy, they love to put these babies out because that’s how they’re paid,” he explains. “And that’s where you have to be careful because the quality does start to dissipate.”

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