Shutterstock Inc. (NYSE: SSTK) and Realogy Holdings Corp. (NYSE: RLGY) have both debuted with strong openings on the day for each of the initial public offerings. In fact, both rose by double-digits at the opening prices and that has not been the norm of late.
Shutterstock priced at $17 per share and opened up about 32% higher at a price of $22.50. That $17 price was already above the range that had been indicated, but the offering was a mere 4.5 million shares. It is obvious that the overallotment option will have been exercised here.
Realogy may be a very large score for Apollo Global Management LLC (NYSE: APO), as the private equity firm has been highly criticized over applying too much debt and leverage to companies that it puts back on the market after taking them private. Realogy priced at $27, which was the top of its range, and its shares opened up 22% at $32.85 for its opening trade.
There is a rule of thumb for IPOs, but we would caution drawing too many lines between cause and effect on this theory. Many investors believe that strong IPOs beget more strong IPOs.
JON C. OGG
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