IPOs picking up steam in U.S.
Bloomberg News Service
NEW YORK — Kraft Foods Inc., the biggest U.S. food company, and money-losing Internet search firm GoTo.com Inc. are among more than 100 companies planning to sell shares, tapping renewed investor appetite for stocks.
Bloomberg News Service
The Nasdaq composite index's 38 percent rise since April 4, and the Standard & Poor's 500 index's 16 percent jump are opening up a business that's been all-but-shut this year.
Kraft, a division of Philip Morris Inc., is planning to sell $8.4 billion of shares on Tuesday, the second-largest initial public offering in the United States.
Only 35 companies have gone public in 2001, the slowest start to a year in 20 years, according to Morgan Stanley Dean Witter & Co. About 68 are now planning to raise about $21 billion in initial public offerings, and more than 43 companies intend to sell another $5.5 billion in secondary sales.
"Things are picking up," said Stephen Tuen, manager of the Kinetics Internet Emerging Growth Fund. "The kind of company that can come to market is very broad and that's a good sign."
Gains for companies that sold IPOs this year also are heartening investors. All but four are trading above their offering price. Simplex Solutions Inc., which raised $48 million at the beginning of May, has almost tripled. Agere Systems Inc. is up 32 percent since its $3.6 billion offering in March.
"That certainly helps in terms of attracting more investors," Tuen said.
The number of stock sales has been accelerating, with 15 in April and 52 in May. According to Morgan Stanley analyst Henry McVey, the backlog, or those waiting to go public, has swelled 18 percent from last month. They're unlikely to add to anywhere near last year's 395 IPOs and 1999's record 510.
Technology-related IPOs represented 12 percent of total IPO proceeds in May, compared with 53.5 percent of the total a year earlier, according to McVey.
Kraft, a division of Philip Morris Inc. that makes Ritz Crackers, Maxwell House Coffee and other well-known food brands, is planning to sell $8.4 billion of shares on Tuesday, the second largest initial public offering in the United States.
