Hard Week for IPOs - Market Update

Market Update Analysis:

Hard Week for IPOs

Author: Yordanka Bahchevanska
123jump.com
Last Update: 5:36 PM EDT July 02 2006

Retailer J. Crew Group, which surged 28% on its first day, was the only bright spot in the IPO market this week. Two other IPOs priced below forecast range, one was amended with a downgraded forecast range, and three others were postponed or withdrawn. Stock markets have tumbled since May on worries about inflation and interest rates.

106 initial public offerings have been priced so far this year as of July 1, 2006:

- 54 IPOs are currently trading above initial offering price;
- 49 are trading below the offering price;
- and 3 are trading at their offer price.

Six IPOs were priced during the week of June 26th, 2006. There aren’t any deals on deck for the next week.

IPO PERFORMANCE

ADVANCERS:

J. Crew (JCG: chart) priced an initial public offering of 18.8 million shares on Tuesday at $20 a share. The price came above a $15 - $17 forecast range.

Shares represent about 33% stake of the company and the deal is worth $376 million.

J. Crew Group''s shares jumped nearly 30% above their initial trading price on their first day Wednesday.

The underwriters have an option to buy up to 2.8 million additional shares from the company at the initial public offering price less the underwriting discount, to cover excess demand.

Goldman Sachs and Bear Stearns are the lead underwriters on the deal.

The New York-based company reported its an increase in its first-quarter revenue to $240 million, up 14% from a year ago.

J. Crew opened six stores in fiscal 2005 and plans to open 15 to 30 stores in fiscal 2006. After that, it plans to open between 25 and 35 stores annually, according to the filing with SEC.

The company began in 1983 as a mail-order business, and is known for casual men''s and women''s clothing and accessories that it sells in stores, catalogs and online.

Texas-Pacific Group bought J. Crew in 1997 and is expected to own as much as 40% of the company after the offering, according to the filing.

The deal ranks as the second-richest apparel seller ever to go public in the U.S., right after the $619 million IPO from Gucci Group (GUCG: chart) in 1995.

The company’s shares closed at $27.45 on Friday, up 37% from the initial offering price.

South Korean online retailer Gmarket Inc. (GMKT: chart) priced its 9.1 million American depository shares at $15.25 each, at the top of an expected range of $13.25 - $15.25 on Thursday. Each ADS is worth one common share.

Gmarket raised $139 million in the IPO.

Selling shareholders offered about 3 million of the shares on offer, with Gmarket selling the rest.

The company, which is 10% owned by Yahoo Inc. (YHOO: chart), fell 1% in its first day of trading, as investors grew less confident in new offerings.

Gmarket''s Nasdaq listing is the fourth this year for a South Korean company and it is the second-largest online retailer in South Korea after U.S. auction giant eBay Inc. (EBAY: chart).

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