Golfsmith International Holdings Inc., Volcano Corp., and Synchronoss Technologies Inc. failed to raise as much as they sought in initial public offerings, signaling that investors might be losing their appetite for some new stocks.
Shares of Golfsmith, the nation’s largest golf equipment retailer, sold for $11.50, below the company’s target of $14 to $16 a share. Volcano, a maker of medical devices to treat heart disease, also fell short, selling shares for $8 instead of $10 to $12. Synchronoss, whose software helps process Internet orders for phone companies, priced its IPO at $8 after setting a range of $9 to $11. All three sales took place late Wednesday.
The companies pushed ahead after the Standard & Poor’s 500 index fell enough over the past five weeks to give up all its gains for the year until moving back into positive territory Thursday, and shares of Vonage Holding Corp. plunged 42 percent since its IPO on May 23.
The Bloomberg IPO index, which tracks new shares in their first year, has dropped about 11 percent since reaching a six-year high last month.
“With a weak market people aren’t going to jump into unproven securities,” said Phil Stiller, a research analyst at Greenwich, Conn.-based Renaissance Capital Corp., which manages the IPO Plus Aftermarket Fund. “In order to get the deals done, people have had to discount the prices a little bit.”
Houston Wire & Cable Co. was the only IPO to meet its target Wednesday. The distributor of specialty wire and cable to U.S. electric companies sold shares at $13, the middle of the expected $12 to $14 range.
Combined, the four companies raised $290.5 million, or 24 percent less than the maximum $380.2 million they sought.
Shares of Houston Wire jumped $2.21, or 17 percent, to $15.21, on their first day of trading. Volcano stock rose 80 cents, or 10 percent, to $8.80. Synchronoss gained 85 cents, or 10.6 percent, to $8.85. Golfsmith slid 40 cents, to $11.10. All trade on the Nasdaq stock market.
Some recent IPOs have done better. VeraSun Energy Corp., the nation’s second-largest ethanol producer, sold $419.8 million of stock in its IPO two days ago, more than expected. The shares jumped 30 percent Wednesday, but slid $2.85, or 9.5 percent, to $27.15, on the New York Stock Exchange Thursday.
MasterCard Inc. has gained more than 25 percent since its IPO on May 24. It sold shares at $39, below a $40 to $43 range, but the stock reached $46 Thursday in after-hours trading on the NYSE.
Should demand for IPOs decline more, some companies that have filed to go public might not be able to sell stock at a high enough price to make the offering worthwhile, said David Menlow, president of Millburn, N.J.-based IPOFinancial.com.
Offerings by financial-services companies in particular would be at risk, he said. “They’re going to have a hard time right now, because people are viewing the selloff in the marketplace as a transactional event that most directly affects the brokerage community.”
Financial-services firms Cowen Group Inc., Evercore Partners Inc. and Ryan Beck Holdings Inc. filed IPOs this year. Keefe, Bruyette & Woods Inc. announced plans to take the employee-owned company public, but it hasn’t yet filed.
Cowen increased the size of its offering to as much as $270.9 million from $100 million, according to a regulatory filing this week. Evercore plans to raise as much as $86.3 million, while Ryan Beck expects proceeds of as much as $100 million.
Several European firms have scaled back or abandoned IPO plans. Standard Life Assurance Co., Europe’s largest customer-owned insurer, said Thursday that it would lower the price for its planned $2 billion IPO.
