What was the biggest US IPO of 2007 so far? You don’t know off the top of your head? No matter — you can just pop over to MarketWatch, which has a whole story on Q1 IPOs, headlined “IPOs fatten by 18% to $12 bln in first quarter“. All you need to do is read the lede:
NEW YORK (MarketWatch) — Led by a strong performance from hedge fund manager Fortress Investment Group, the crop of U.S. initial public offerings raised 18% more money in the first quarter, tipping the scales at nearly $12 billion.
But there’s a problem. Read on a bit:
Fortress Investment Group continues to stand out as the biggest first-day gainer so far in 2007 with an opening day pop of 67%. It’s also the second-richest IPO to debut so far this year with a purse of $634 million.
You can read on even further: you won’t find any information on what the first-richest IPO might have been. Instead, you get lots and lots of information of how those IPOs did in the secondary market: on their first day, and to date.
Political journalists are often taken to task for treating important political news only in terms of electoral horse races. This is exactly the same syndrome: IPOs as horse race, with precious little attention paid to the fact that they’re actually means of raising capital. So we hear about the small-cap companies whose stocks rose a lot, but we don’t hear at all about the company which actually managed to raise the most money in the stock market last quarter.
It’s not just MarketWatch’s “IPO Report”, either: Red Herring’s “IPO Watch“, which puts the headline number at $10.2 billion rather than $11.9 billion, does exactly the same thing. But at least it doesn’t talk about an “18% gain” without saying what the number is an 18% gain from. (The fourth quarter of 2006? The first quarter of 2006? The third quarter of 1961? Who knows?)
So, bless Reuters. It, too, spends a lot of time talking about first-day pops — which probably say more about the pricing abilities of investment banks than they do about the strength of the underlying companies. But eventually we find this:
Movie theater advertiser National CineMedia Inc. offered the largest deal of the quarter at $882 million, closed its first day, Feb. 7, up 22 percent at $25.67 and closed the quarter at $26.70.
There — see? In amidst the pricing information, we’ve found the actual leader in terms of money raised! But because it’s not a hot sector and it didn’t radically underprice its IPO, most of the financial press feels perfectly comfortable ignoring it.