Four U.S. IPOs get mixed response from choosy investors
Four U.S. IPOs were received with varying levels of interest on their market debut, signaling that investors were being very selective of where they want to put their money in.
IPO investors are trending toward offerings that have priced above their expected range and largely ignoring those that did not, according to some analysts.
The IPO market sees two different types of investors, said Josef Schuster, founder of IPO investment firm IPOX Schuster LLC.
First, the older, institutional investor that looks at the balance sheet and growth prospects of the company. Second, there is participation from indiscriminate traders who just want to fill up the books and end up jacking the stock.
Specialty tea retailer Teavana Holdings Inc
Chefs' Warehouse Holdings
If there is a lot of momentum, there's talk on the television about these stocks opening well, then investors are paying attention, David Menlow, president of IPOfinancial.com, said.
It's herd mentality. A lot of people are looking over their shoulders to see what everybody else is doing.
Most recently, investors bet heavily that popular coffee-and-breakfast chain Dunkin' Brands Group Inc
Dunkin' Brands' highly anticipated IPO was priced above range, and it saw the stock soaring on the first day of trading on Wednesday.
Dunkin' has left a very good taste in the mouth of initial IPO investors, Schuster said.
The stars are also aligning for companies catering to a niche clientele like Teavana and Chefs' Warehouse, with investors flocking to them, analysts say.
There's plenty of expansion opportunities for Teavana, a chunk of their business is online and it's just about how they execute it, Schuster said.
(Reporting by Brenton Cordeiro and Tanya Agrawal; Editing by Gopakumar Warrier)
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