Testing the IPO Window UPDATED

The IPO window will be tested this week with six offerings, two of which are venture-backed companies: Broadsoft (BFST), a 1998-era telecomm software company, and Motricity (MOTR), a 2001-era mobile software company.

UPDATE: Broadsoft priced at the bottom of its range, a poor sign. It fell 8% in its first day. Motricity dropped the size of its offering and lowered its range quite a bit from $14-16 to $10-$11. Watch Friday to see how it does.

The last tech IPO, ReachLocal (RLOC), priced below its range and fell below early last week, only to rise back slightly over the offering price. From the first day close, it has dropped quite a bit and is still down (see chart), but a few more days like today and it goes back to positive in the after-market. 

The keystone IPO is coming up: Tesla Motors (TSLA), the first serious auto startup since Chrysler in 1925 and the biggest auto IPO since Ford in 1956, should price the week of Jun28. The lead underwriters, Goldman Sachs and Morgan Stanley, announced a price range today of $14-16, valuing the company at $1.5B and seeking to raise $167M from the public and another $50M from Toyota. This is an increase from their expectations back in January when they first filed. Unlike Ford, which was profitable very quickly, Tesla has yet to make a profit; yet is highly awaited as an IPO. The increase is a good sign of confidence by the underwriters. 

While the tech press is generally positive, we do have the headline Blockbuster or Dud? based on recent green IPOs. A123 (AONE) jumped 50% on its first day but since has fallen to 33% below the IPO price with an aftermarket return of -56%. The Wall Street crowd may be even less kind, saying: "The car business is a fairly weak business, and there's lots of room for Tesla to run out of juice before getting plugged on." 

After Tesla, ZipCar intends to IPO, followed by GM re-IPOing after its LBO by the US Govt. The Tesla and Zip IPOs may be coming out a bit prematurely for the market to be ready for high-burn unprofitable ventures which lack the scale of competitors. Still, they both have enough sizzle to make up for the lack of beef. 

Tesla will test the IPO appetite and likely determine whether it remains open or shuts down for the rest of the year. 

Comments

[Account Deleted]

SP 500 Support and resistance lines
http://niftychartsandpatterns.blogspot.com/2010/06/sp-500-support-and-resistance-area.html

[JT]

Market making new highs for the move. Once again, the lower opening can be bought. Bears scrambling to cover.

[da bear]

I am looking forward to the Tesla IPO.
I doubt that the market tanks before that IPO comes out.
Since that is coming out in late June I think that this rally could last until late July now. Or if not,the S&P 500 is working on the right side of a head and shoulders top formation, so the S&P 500 may top within the next few weeks and then churn around the top before a big sell-off this fall. The strong hands will sell to the weak hands, the sexy stocks will rise, along with energy and metals, but the blue chips will not confirm.

A chart of GDX is showing a very nice B wave forming off the Fall 2008 lows.
The pattern is very similar to how the DOW came off the 2002/2003 lows then made its way back into the 11,000 area then burst through that to make new all-time nominal highs even though it was in a B wave.

go to bigcharts.com and pull up a chart for GDX and use all-time data.
See for yourselves.

I still think that oil gets to about $90 and gold makes new highs. I am not sure we can get there by the end of the month. Although everything should top by early September. ... with sometime in July being the most likely target.

da bear

[Michael]

Hey Vipul,

How you likey my "Stock Pick of The Year" so far???

EXAS
:)

[Account Deleted]

Dow jones important levels to watch out for
http://niftychartsandpatterns.blogspot.com/2010/06/dow-jones-important-levels-to-watch-for.html

[Mamma Boom Boom]

--June 15, 1931: Dow 137.03 +0.05--

US Chamber of Commerce "will study problems of depression and means of recovery through 20 special committees mobilizing business men on a large scale."

Once again, the NY Welfare Council "warns girls and women to stay away from NY City unless they are assured of making at least $25 a week. The average working girl in NY City pays $23.60 a week for ordinary living expenses ... Room $8, food $10.50, clothing $3.85, carfare, telephone and postage $1.25. This leaves only $1.40 a week for recreation and incidentals," including medical care [Note: not sure if that comes under recreation or incidentals].

Market wrap: Stocks opened weakly, with extensive profit-taking in rails in an apparent case of sell-the-news, and some apparent nervousness about the German situation; leading rails fell 1 to 3 points in the first 15 minutes. Volume then dried up and trading settled into a narrow range through the first hour. Buying reappeared in the second hour, and prices worked broadly higher; industrial leaders including Steel and Can recaptured earlier losses while rails renewed their upswing. Bonds moderately active, prices generally higher; US govts. dull and steady. Commodities mixed; grains firm; cotton off only slightly in spite of favorable weather reports and disappointing May consumption figures. Copper remained at 8 - 8 1/4 cents, with buying very small.

[BearsRus]

This is it!
GET OUT NOW... P3 about to start!
Roger told me so!!!

[swing waves]

IPO's and Mergers are bearish! Final top within one month.

[wtf]

Prechter was right about the stock market declining over 90% back in 1987 when the Dow was at 2000.

Unfortunately, however, the previous sentence is false. This is no fault of Prechter's. It just means he is a horrible prognosticator.

However, he is an excellent guide to the markets. He provides timely, well-written, perspicacious advice to those who pay him for his services.

That, however, is just plain wrong. He is one of the very worst guides to the markets, perhaps the worst.

So it's easy to see why his opinions are so valued and oft-referenced by this website. They are almost always extremely valuable.

I mean, almost always extremely horrible.

Wait! Which is it? I forget? Is he a great sage? He's full of wisdom and insights, right? Right??? Please??????

[Bird]

Prediction is very difficult, especially when it involves the future.

[yelnick]

Bird, well said, but remember: for an investor, when you come to a fork in the road, take it.

[wtf]

That's what Elliottician Robert Prechter says. He also invented the phrase "Slope of Hope" and the discipline called "Socionomics," a rigorous-style, scientifical developed approach to understanding (finally!) mankind. While it still has a few kinks to be worked out, it has enabled its followers to know well ahead of time who will win elections, which sectors will thrive, and why the mainstream media still doesn't get it.

Thanks to Robert Prechter and his team of academic-style helpers, we are finally (finally!) getting a handle on such fascinating phenomena as wars, booms, busts, hemlines, and crackpots.

[Bird]

I don't think Socionomics has it. There is a Time Code to events in history.

Take two related historical events. Look at the time divisions between them: .5, .33, .66, .382, .618., 1.0. Sometimes 1.0 rolls over and over, backwards or forwards. A third event is often related. Especially if a "coincidence" is involved (Eg. start and end dates of WWI) Look at 1993 and 2001 WTC bombings to the day. flip over and over back to ...what date...to what day?...to what hour? A very profound thing I think. Life is a geometrically precise diamond in its essence.

[Cary Lloyd]

Wow. That's really provocative. Thanks for the daily bowl of bs.

[Larry Coyd]

Please Sir, could I have some more...

[Chabazite]

Yelnick - I would be interested in your opinion of the news concerning industrial production that is currently coming from the US. According to the press it all seems pretty positive, but I know you said some time ago that much was 'inventory' related. Is that still your opinion, or do you accept that there is a genuine improvement in economic performance? Kindly. Chab.

[Bird]

Cary/Larry,

As my wife has proven, many of my best ideas and discoveries are rightly ridiculed. And while I am tempted to not have any more, I am stopped in my tracks by one further thought: then she would triumph forever. Can't have that. Can't have that.

On December 5, 1664, a ship sank in the Menai Strait off the coast of Wales. All 81 passengers died, except one man named Hugh Williams. 121 years later, on December 5, 1785, another ship sank in the same Strait in which all died but for one individual—named Hugh Williams! That is strange enough, but things go in threes. On December 5, 1860, a small vessel again sank off the coast of Wales in the Menai Strait. All died except a man named Hugh Williams. In the reports of strange coincidences that record this story, the authors did not realize one thing. 196 years separates the first sinking in 1664 and the last in 1860. The 1785 shipwreck occurs almost exactly on the .618 mark.

I was on the 57th floor of the World Trade Center during the 1993 bombing. The 1993 and 2001 WTC bombings occurred 3118.3 days apart. If you take the span between 9/11 and the first WTC bomb and roll it backwards in time, you get the following:

11 September 2001 WTC Bombing
27 February 1993 WTC Bombing
15 August 1984
31 January 1976
19 July 1967
4 January 1959
21 June 1950
7 December 1941 Pearl Harbor “surprise attack”

Time links Pearl Harbor and September 11, 2001 over a span of 60 years precisely to within 1 day. This is amazingly precise. The Oklahoma City bombing also fits a whole fraction timeline between 1993 and 2001. The combination seems wildly beyond chance.

This has nothing to do with conspiracy theories, but it may be why things like Fibonacci ratios and 50% retracements occur in markets. It may be because everything is part of everything else, a scintillating gem that, like a hologram, reflects related events in all of its parts. Rather than be an oddity, this is probably what LIFE IS. What GOD IS.

I didn't find the WTC-Pearl Harbor sequence by accident. I found it because I expected to find it and went looking for it. I find these links in time in many many historical events. There are war timelines, assassination timelines. Your own birth, children's birth, marriage, divorce, significant surgery, death, are likely to be on a timeline, where time itself serves to measure and link the events.

A friend of scientific bent suggests that because of the sheer massive number of events that occur in the world, coincidences are bound to occur with some degree of frequency. I can't quibble with him. But his point doesn't disprove that something else is going on.

This is where forecasting comes in. It is very hard to do. But, around the edges...may be possible. To some degree.

Cheers.

[Wave Rust]

time linkage does not predict what where or much else. it does imply coincidence.
----------------

the first chart in this PDF file from Wells Capital, jim paulsen, is quite striking and appears to have a good correlation.

https://www.wellscap.com/docs/ecomonic_and_market_perspective/EMPUpdate061510.pdf

weekly jobless claims inverted to stock market

wave rust

[Wave Rust]

yelnick,

" The keystone IPO is coming up: Tesla Motors (TSLA), the first serious auto startup since Chrysler in 1925 and the biggest auto IPO since Ford in 1956, should price the week of Jun28. "

where do you classify DeLorean as a startup? financially troubled but a heck of a car concept

wave rust

[Account Deleted]

SP 500 Hourly trend line break trade with MACD negative divergence

http://niftychartsandpatterns.blogspot.com/2010/06/sp-500-trend-line-break-trade.html

[DG]

Bird,

You need to be like Thales (the first of the philosophers) and translate that theory into action! Otherwise, you end up like the Socrates character in Aristophanes, stuck in "Cloud Cuckoo-Land"! :)

http://en.wikipedia.org/wiki/Thales

"Several anecdotes suggest that Thales was not solely a thinker; he was involved in business and politics. One story recounts that he bought all the olive presses in Miletus after predicting the weather and a good harvest for a particular year. Another version of this same story states that he bought options for the use of the presses not to become wealthy, but merely to demonstrate to his fellow Milesians that he could use his intelligence to enrich himself.[8] This can be considered the first known example of options trading."

Thales has always been a hero of mine.

[Roger D.]

A non-confirmation on the SPX and a hit on Dow 10440. Looks impulsive down.

Roger D.

[Bird]

DG, Very cool re Thales. I'll read up on him.

As you well know, I am endeavoring to do just as you recommend. My jumping up and down at the end of April was related to this.

My trade this morning was related to this. (Very scary!)

[DG]

Bird,

As you know, I'm a "probabilities" man. I believe the gulf between Humanity and The Absolute is unbridgeable.

Even taking it back to trading, there are probably an infinite number of trading methods that have some statistical "edge" over the market. Yet, it's very likely that few of them have the exact same edge, quantitatively-speaking. One may beat the market by 8% a year and another by 8.01% a year. Risk-adjusted, of course!

How would we know when the limit on how much a method can beat the market was reached? Also, who would have an incentive to try to find that limit, if methods that don't necessarily hit that limit still provide a person or the institution that develops it with every possible material good it desired? I mean, if you've got a system that will turn you into the "Warren Buffett of technical analysis", are you really going to strive for more, even if probabilistically it's possible to get it? At some point, the effort required doesn't justify the cost involved. If you don't need the "Holy Grail" to become insanely successful, what's the point of seeking it after success has been achieved, especially when, by seeking it, you put at-risk the success itself, since the only way to put your theories to the test would be to trade them? Wouldn't that kind of be like Tom Brady saying, "You know, I've got a pretty hot wife, but maybe I can do better". Yes, the human heart is a fickle thing, but sometimes the risk just doesn't justify the reward and I don't see how you'd avoid that situation, mathematically-speaking, as you advanced toward finding the Holy Grail.

Anyway, a short trade just triggered for me, so let's see what happens.

[Account Deleted]

Dow jones next main support for the bulls
http://niftychartsandpatterns.blogspot.com/2010/06/dow-jones-trend-line-break-trade.html

[Bird]

DG, our natures differ. At the same time, the idea of mechanically putting on trades that statistically/probabilistically show an edge is not unappealing at all. Sounds great! But I have the following problems with it:

1. A lot of smart guys have tried this and sooner or later failed. Wall Street generally speaking does not appear to have succeeded. If they had, why turn to HFT which skims $ from others? No conscience there.

2. Every time I've attempted a trading plan of a strictly logical nature, it seemed that the probabilities reversed themselves with a "string of bad luck" and I abandoned the effort. Maybe the method was not well researched or maybe I didn't have the mental/financial staying power. I don't know. But the bottom line is that it didn't work for me.

3. What does make sense to me is that life is organized hierarchically, including our intelligence. Our reasoning capacity, while deserving of respect and necessary for any trading approach, is not necessarily all there is to our intelligence. So I'm not sure our trading methods are going to be better off by coming at them strictly and solely from the rational point of view.

Include reason, by all means, but if you don't engage what is beyond it, it finds a way to engage you.

[Eventhorizon]

Bird: I didn't find the WTC-Pearl Harbor sequence by accident. I found it because I expected to find it and went looking for it. I find these links in time in many many historical events.

Bird: Every time I've attempted a trading plan of a strictly logical nature, it seemed that the probabilities reversed themselves with a "string of bad luck" and I abandoned the effort.

Your first statement holds the key to your second. Perhaps you have been "Fooled by Randomness".

[DG]

Bird,

I guess the scenario you'd need to address is let's say that you find a trading method that clearly isn't the "end all, be all", but makes you richer than you've ever wanted or needed to be. But, in order to find the "end all, be all", you need to risk what you've already gained. At what point do you stop?

Also, regarding point 3 above, you do realize that many philosophers actually put "non-reason" BELOW reason in the hierarchy of human capabilities, right? In that sense, attempting to engage other parts of the intelligence which are unrelated to reason would actually be a regression, not an advance.

One also wonders what would arise if everyone "put aside reason" simultaneously. Would there even be a market to engage with? Wouldn't the resulting "unreason" end up looking a lot like "Lord of the Flies"?

That gets beyond markets and more into anthropological questions of what the social and intellectual requirements for markets are, but it's not just an abstract question, because we know from history that there are societies in which reason has very little role to play (except for "practical reason", like understanding animal migration patterns or discerning which parts of the surrounding environment are "human-friendly") and those societies don't typically have anything of the complexity of a financial markets and a actually live more of a subsistence life, where those places even still exist, e.g. the Amazon River basin.

[Bird]

I may indeed be fooled by randomness, or just all by myself. Now its different to read about the calculations behind the pearl harbor-WTC link than find them on your own, but now that I've shown you, and assuming you understand how unlikely the sequence is, are you equally fooled? Or do you just dismiss it as just another meaningless coincidence? I guess it comes down to that. However, if you are a Jungian and you are interested in studying sychronicity, seeing a time element involved might be of some interest in understanding Jung's theory.

DG, empatically, I do not advocate putting aside reason. Not in the least. I am raising the question as to whether reason is enough. Put another way, if reason does not lead to something else, something HIGHER, it is prone to error from a direction that reason alone could never see, but maybe some human capacity, even in you, could. How many experts said BP and RIG were slam dunk no brainers about 2 months ago?

[upstart]

Roger D., again I say take it easy. I bet at some point a 2.5% pullback or so is coming and then another upward lunge before the decline.

[Roger D.]

Upstart,

I 'm taking it easy, been retired since 2003 at 50,lifes good.

RD

[Rally-Rider]

Is that Junky Roger D. Still on his bearoin?
Hopefully he'll have the sense to lighten up here.
Don't self-destruct old-boy. We'll do some beroin together at the apropriate time, meanwhile don't go all "Prechter" on us.

[Roger D.]

Here's my last chart. I think we have topped, time will tell. I think it's time to put you guys out of your misery.

Still short!

Roger D.

http://www.screencast.com/users/parisgnome/folders/Default/media/cd22543b-c438-42c3-966a-bffe0a0c44c5

[Mr. Panic]

AAII bulls up to 42%. Quite a jump (anecdotally, I can see evidence of this as on one site where I occassionally post, the moderators are writing about trend change and looking for cash rich companies to scoop up)......Extreme short term bullish sentiment according to Sentiment Trader so I guess we got extreme cumulative tick again.

Meanwhile the stock market has morphed from 1929 back to 1987 with the pattern from the May 25th low almost identical to the Sept 7-to early October 1987 B wave rally and an almost identical pattern has formed on the McClellan Oscillator. Look for a sharp thrust anytime now although it could take after the 1987 /1929 pattern and put in another negative doji. Intra-year resistance currently holding the market back (Jan first week low SP 1115,Dow 10430). Yesterday's SP high 1118 (or 911 ie 11(9)).
DeMark wave finally confirmed a wave 2 on Tuesday's big up day (a new 8day high). Currently on Day 6 of a TD daily upcount that needs to be stopped before it gets to day 9. Weekly downcount can only be maintained by a weekly close below 1087 (currently on bar 6 of the downcount) Of course 1087 is a cute little close too ie 10-87 and the Nov 2009 low is at 1029 ie. (10-29)

[upstart]

Excellent retirement Roger D. Congrats.

[Fellow bearoine addict]

>>Here's my last chart. I think we have topped,
Roger D.

Posted by: Roger D. | Thursday, June 17, 2010 at 10:15 AM<<

If I were Hank Wernicki I would describe this condition as a child fractal of EWI's Hochberg (Hochberg=Prechter's daily time frame clone that's been known to get it wrong for weeks on end).

But I'm not Hank so I'll just plead that you not overdose on the bearoine! Think of your kids and your friends on this site! Don't be a junkie old buddy!

Alright, alright, I confess I just opened a small bearish position (out only for a quick scalp.)

So I'll just kick back and enjoy the bearoine with you till mid-day tomorrow

[Roger D.]

"If I were Hank Wernicki I would describe this condition as a child fractal of EWI's Hochberg (Hochberg=Prechter's daily time frame clone that's been known to get it wrong for weeks on end).

But I'm not Hank so I'll just plead that you not overdose on the bearoine! Think of your kids and your friends on this site! Don't be a junkie old buddy!

Alright, alright, I confess I just opened a small bearish position (out only for a quick scalp.)

So I'll just kick back and enjoy the bearoine with you till mid-day tomorrow"

Be my guest,

There are a lot of non-comfirmations setting up.

RD

[Fellow bearoine addict]

Thanks. Got any lava lamps around? :)

[software testing services]

I am curiously waiting for the result of testing the IPO windows. I wish test will go positive and good. And I am hoping you will update us regarding the result of it..