In classically detailed fashion, DealBook pens an enjoyable piece about LIPOs. Not the least because it both cites me and takes up my LIPO definition. It seems that today is flatter Equity Private day. Didn't you get the memo? Sorkin's DealBook points to Thomson financial data to point out that LIPOs haven't performed at all badly in the grand scheme of the IPO markets. (And don't miss the always absurd ramblings of Dr. Klein). Uttered DealBook:
...what do the numbers say about buyout-backed offerings? So far this year, these kinds of offerings have performed worse — but only slightly worse — than their non-buyout-backed counterparts. Figures from Thomson Financial on the 107 I.P.O.’s (68 conventional, 39 backed by private equity) that debuted this year show that I.P.O.’s connected to buyout firms are down about 2.8 percent on average, while non-buyout offerings are down about 2.3 percent. Excluded from the figures were several I.P.O.’s from blank-check companies, which raise capital solely for acquisitions.
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While the top non-buyout-backed offerings outperformed those with private-equity origins, the worst of them also lagged behind their more-leveraged counterparts. The year’s most successful I.P.O. to date has been Chipotle Mexican Grill, with a 135.5 percent return. The biggest flop has been the similarly un-leveraged Vonage, which has falled 61.8 percent since its debut. Strip away the best and worst performers in each category and the average returns grow even closer. Regular I.P.O.’s are down 3.5 percent, while private-equity-backed offerings are down 3.6 percent.
