The IPO market didn't roar back to life in 2012 as many thought itwould, but the year of the Facebook flop wasn't all that bad, either.
Afterstarting off at a feverish clip, and peaking in mid-May with the widelyanticipated Facebook initial public offering, the market for newcompanies selling stock to the public ended with a whimper. The poorreception of Facebook's IPO stalled the market, but couldn't undo whatwas a healthy, but not outstanding year, for IPOs.
Thenumbers tell the story of a year for IPOs that may not be one for therecord books, but also shows a steady improvement, including in terms ofthe:
* Proceeds from IPOs. Helped in large part by the$16 billion raised by Facebook, U.S. companies generated $43 billionduring the year, says Renaissance Capital. That was up 19% from 2011and the biggest year for proceeds since the $49 billion raised in2007.
* Number of deals getting done. All told, 128companies managed to sell the shares to the public, up 2.4% from 2010.While that's more than quadruple the number of deals in the trough yearof 2008, 2012 still couldn't keep up with the 154 IPOs in 2010. It wasa year of smaller deals, as the median proceeds raised by IPOs fell23%.
* Big first-day gains return. Initial investors areagain demanding to get compensated for taking on the risk of IPOs. Theaverage first-day pop of IPOs in 2012 was 14%, the biggest in adecade, Renaissance says. Investors drove a hard bargain, as 40% ofIPOs priced below their initial price ranges. That's close to therecord of 42% IPOs that priced below their expected ranges in 2010.
Butthe fact that the IPO market is still falling short of the long-termaverage of about 200 deals a year shows that while there's a recoveryunderway, the market is still relatively slow.
And no better toshow the lingering pain felt by IPO investors than in the performanceof Facebook shares. The No. 1 social networking company was the year'sbiggest IPO and third-largest U.S. IPO ever. But still, the shares aretrading about 30% below their $38 a share IPO price -- and have neverclosed above that level.
Other than Facebook, there weren't manymarque names among the year's biggest deals. After Facebook, in terms ofsize, was financial firm Santander Mexico, energy firm Linn, financialfirms Realogy and Carlyle Group, and technology firm Workday. And therewere some notable losers, too. Technology firms Envivio, CafePress andmaterials firm Ceres dropped 81%, 70% and 65% respectively.
InternetIPOs were also weak. Coming off the poor performance of Groupon andZynga in late 2011, just 13 Internet IPOs got done in 2012. That was a43% decline from 2011. Just five Internet deals got down following thepoor initial reception of Facebook.
But investors who were lucky,or knew what to look for, found some big scores. Among the best IPOsof the year included technology firms Vipshop and Guidewire Software aswell as health care firm Intercept Pharmaceuticals, which gained 175%,129% and 128% from their IPO prices, respectively.