Standard & Poor`s New Issues Index soared 56.4 percent in the first six months of 1986, compared with an 18.7 percent rise in the S&P 500 Index and a 22.2 percent increase in the S&P 250 Index, the business research group said. A total of 159 initial public offerings were included in the index, which excludes banks, savings and loans and limited partnerships and uses only offerings with a market value of $5 million or more and a per-share offering price of at least $5.
That was 25 percent increase over the former record of new issues, 127 in the first half of 1983, S&P said.
Of the 159 issues, 88 advanced in price, 63 declined and 8 were unchanged.
S&P`s Robert Natale said that though the number of dollar volume of new issues is running at a record pace, ”a cautious stance on IPO (initial public offering) investing is called for now, unless investors can purchase shares at the offering price and sell them quickly.
”There are still some good companies going public but many are overpriced given their historical industry valuations,” he said.
The biggest winner in the first half of 1986 was Home Shopping Network, a cable channel shop-at-home company underwritten by Merrill Lynch & Co. The company went public at $18 May 13 and closed at $95.37 June 30, for a 430 percent gain.
The second best performer was Telecommunications Network, a radio paging and telephone answering service offered by Drexel Burnham at $7.31 (adjusted for a 3-for-2 stock split) Feb. 4. The issue closed at $19.75 June 30, for a 169 percent gain.
The top loser was Synercom, a computer company, which fell to $8.50 from its offering price of $15 March 7. The underwriter was Morgan Stanley.
Good Guys, a consumer electronics retailer brought public by Montgomery Securities, was the second biggest loser, falling 37.5 percent to $8.75 from its offering price of $14 Feb. 6.
