The Memorial Day weekend marks the unofficial start of the summer, but US initial public offerings might find the hot season a bit chilly.
While the past week was a busy one for IPOs, the deals that came to market largely did so only after being priced below initial estimates.
Included in that group was the largest US IPO of the year, Genworth Financial, whose 145 million share offering priced at $19.50 a share instead of its estimated range of $21 to $23 a share.
So what does this mean for IPOs and how they will fare during the typically slow summer months?
"That's the million-dollar question," said Quinten Stevens, co-head of capital markets at J.P. Morgan Chase & Co.
Many of the companies now holding their IPOs filed their original registration statement with US securities regulators earlier in the year, when the stock market was performing better and valuations were higher.
With the stock market now jittery over oil worries, the situation in the Middle East and US interest rates, companies may have to re-evaluate, experts said.
"We need to see some stability return to the secondary trading market for the current backlog of IPOs to be successfully executed," Stevens said.
Despite the rocky stock market and the spate of IPOs pricing below expectations, the backlog of companies seeking to go public remains strong.
There have been roughly 190 filings since the beginning of the year, compared with about 120 at the same point a year ago, said John Fitzgibbon, an IPO analyst with RedHerring.com.
"The numbers have been building," he said.
As of Thursday morning, the year's 70 IPOs raised $13.8 billion.
That compares with the paltry 7 IPOs during the same period last year, which raised $745.7 million, according to Thomson Financial.
But it is not all smooth sailing, with biotech deals in particular having a tough time of it.
Among those pricing their initial public offerings below expectation last week were biopharmaceutical companies Critical Therapeutics Inc and Acadia Pharmaceuticals Inc.
Two biopharmaceutical companies will test the waters next week, including Inhibitex, whose IPO was originally expected to price this past week.
The company, which focuses on preventing and treating bacterial and fungal infections in hospitals, initially filed with securities regulators to offer 5.9 million shares in range of $10 to $12 per share.
After its offering was delayed, the company on Thursday cut the estimated price on the offering to between $7 and $8 per share.
It has applied to list its shares on the Nasdaq Stock Market under the symbol "INHX". Thomas Weisel Partners LLC, Lazard and Harris Nesbitt are underwriting the deal.
Also on next week's calendar is Metabasis Therapeutics Inc, a biopharmaceutical company focused on drugs treating metabolic and liver diseases.
The San Diego-based company has filed to sell its shares for between $11 and $13 per share and it has applied for a Nasdaq listing under the ticker symbol "MBRX".
SG Cowen & Co, Deutsche Bank Securities, Thomas Weisel Partners and Legg Mason Wood Walker Inc are underwriters for the IPO. "The pharmaceutical deals, they have to walk into this with their eyes open," Fitzgibbon said. "They've seen too many of these (deals) flood into the marketplace and they've all more or less gotten chopped down."
Also on the calendar for next week is Global Signal Inc, a real estate investment trust that owns wireless towers and other communications sites and was formerly known as Pinnacle Holdings Inc.
Pinnacle filed for Chapter 11 bankruptcy protection in May 2002 and its plan of reorganisation was confirmed by the bankruptcy court in October 2002.
Global Signal has filed for an initial public offering of 7 million shares in the range of $16 to $18 per share.
Morgan Stanley, Banc of America Securities LLC, Lehman Brothers and Raymond James will underwrite the offering, according to its filing. It has applied to list its shares on the New York Stock Exchange under the symbol "GSL".
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