IPO Market waits for Facebook

In a year heralding the landmark initial public offering “IPO” of Facebook Inc. (FB), share sales got off to a slow start.

While more companies tapped equity markets in March, IPOs globally raised $16.2 billion in the first quarter, the least since 2009.

That kept the backlog of deals in the U.S. near the highest in more than a decade.

Investors are still smarting after losing money last year on IPOs from Groupon Inc. (GRPN) to Glencore International Plc, even as U.S. stock market volatility fell to an almost five-year low in the quarter and set the stage for a rebound. Share sales in the U.S., Asia and Europe picked up in recent weeks, led by Allison Transmission Holdings Inc. and Dutch cable-television operator Ziggo NV.

“People are still waiting to see that the IPOs that are coming out now are going to work,” said Joe Reece, global head of equity capital markets at Credit Suisse Group AG, and he added “The market has definitely been improving, especially during March, but people still have a healthy degree of skepticism about the IPO market overall.”

The most recent companies to hold share sales have been rewarded by investors, with about two-thirds trading above their offer price, the data show. That contrasts with Glencore, which held its IPO in May and had lost 27 % of its value since that time, before today. Online coupon provider Groupon had dropped 12 % since going public in November.

More companies may be looking to take a cue from Facebook, which is planning a $5 billion IPO in early May, according to people with knowledge of the matter. A share sale by the Menlo Park, California-based company would be the biggest offering for an Internet company in history, as Bloomberg stated.

To be mentioned that nine companies raised $1.4 billion in U.S. IPOs this week, the most weekly initial offers in the country since December 2010, Bloomberg data show.