It's the biggest week for initial public offerings since the end of 2006 with a whopping 16 companies scheduled to make their trading debut.
Forget April showers. This year it's April IPOs.
The question for investors is how to read this flurry.
The reality is all 16 IPOs probably won't happen this week. Investors have their limits, and anytime IPOs heat up, some wonder whether it's a repeat of late 1990s and year 2000 when companies, especially in the tech sector, were going public before they were ready.
Who can forget the Pets.com disaster?
Kathy Smith of IPO investment advisory firm Renaissance Capital says there shouldn't be major concern about the IPO market overheating, but it's clear there's going to be bit of a correction.
Smith says there's "a huge backlog" of IPOs that weren't launched because of the 2008 financial crisis and then other periods of drama such as the debt ceiling battles and shutdowns in Washington D.C.
Because everyone has been trying to jump back in, what we're currently seeing is the market "pushing back on price", according to Smith. But she thinks that the correction in IPO pricing is "healthy and necessary" as market forces play out.
A major flop at the end of March was the IPO for King Digital Entertainment (KING), the parent company of addictive online game Candy Crush. The stock dropped 15.5% on its first day of trading and is still below its IPO price.
This week there was a lot of attention on La Quinta Holdings (LQ), which ended its first day of trading Wednesday up slightly. The hotel chain priced the night before at $17 a share, below the expected $18 to $21 range.
Another good barometer of the IPO market will be Ally Financial (ALLY), which is expected to price in range of $25 to $28 per share and begin trading on Thursday. The old GM auto lending unit spin-off, which was bailed out by the U.S. Treasury, is predicted to raise $2.5 billion.
The other key story this year is Chinese IPOs. On Wednesday iKang Healthcare Group (KANG), China largest provider of preventative healthcare, surged more than 8% higher after its IPO on the Nasdaq.
Investors have approached many of these Chinese company equities with curiosity and caution.
The next big Chinese IPO will be Weibo (WB). The company, which some have called the "Chinese Twitter," released SEC documents late last week showing that it was planning to offer 20 million shares at between $17 to $19 a share. The goal is to raise around $380 million.
Next week will see LeJu Holdings (LEJU), an online real estate services platform that plans to raise $200 million.
It's all a precursor to an even greater Chinese phenomenon that's expected to hit the market soon: Alibaba, which others have compared to a combination Amazon/eBay of the world's second biggest economy.
Alibaba, like many other companies, is hoping the IPO rush keeps running a little longer.
Yahoo CEO Marissa Mayer may have a spring in her step this morning. Yahoo's stock is higher following the news that Alibaba, the Chinese leader in e-commerce, was preparing to file for an initial public offering in the United States.
Yahoo owns a 24% stake in Alibaba. The stock has been volatile for the past few days due to speculation about a possible IPO filing from Alibaba.
Alibaba has been compared to MOREPatrick M. Sheridan - Mar 17, 2014 1:23 PM ET
Shares of Yahoo (YHOO) were down Friday after the company's new CEO, Marissa Mayer, said she's reviewing Yahoo's business strategy.
That's not usually a bad thing but it's making investors nervous.
That might be because the review could lead to changes in the restructuring plan the company has already started to implement. It could also throw a wrench into a previously announced plan to return the cash it generated from a deal MORECatherine Tymkiw - Aug 10, 2012 11:58 AM ET
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