Transcripts

The Comeback of the IPO

PAUL KANGAS: One of the most anticipated initial public offerings in months is set to trade Thursday in Japan. That's when Sony financial holdings will start trading, spun off from its powerful electronics parent. That IPO and others are setting the stage for a resurgence in the marketplace for new offerings. As Scott Gurvey explains, IPO's pretty much dried up in late summer when the stock and credit markets were in turmoil.

SCOTT GURVEY, NIGHTLY BUSINESS REPORT CORRESPONDENT: The once thread- bare calendar for initial public offerings is beginning to fill up as Wall Street moves beyond the summer doldrums. Market watchers say investors are also beginning to come out from beneath their desks, where they sought refuge from sub-prime mortgage fallout. The result of that scare the experts say, is that good quality IPOs are coming to market and doing fairly well. Tony Dwyer of FTN Midwest says cash always finds someplace to go.

ANTHONY DWYER, EQUITY STRATEGIST, FTN MIDWEST SECURITIES: It's kind of like, if the consumer has money they'll spend it. If private equity investors have money, they'll buy something with it and that's what we're seeing.

GURVEY: IPOs coming up and attracting attention include a $520 million offering by Affinion, a marketing company providing services like membership and credit card loyalty programs, $180 million by Textainer, which leases shipping containers and $440 million by Virgin Mobile, Richard Branson's player in the wireless telephone market. Sony is also expected to pick up $3 billion by offering a minority stake in its financial services unit. The offering will be made primarily in Japan. Other Sony spin-offs have been rumored. Some of the cash may fund Sony's plan to lower prices on its PS-3 video game console in time for Christmas. David Menlow of the IPO Financial Network says he thinks the IPO market will be strong well into next year.

DAVID MENLOW, PRESIDENT, IPO FINANCIAL NETWORK: The IPO market is going to continue moving into 2008 with some very strong fundamentals. The amount of money that is going to be available to bring these companies public is still overflowing in our estimation. There are also going to be many of the private equity sponsored offerings from merger and acquisition activity that will come to the marketplace, but deals that were probably done two to three, maybe even four years ago.

GURVEY: Menlow says the IPOs that will do the best will be the ones where the money is used to reduce leverage or to expand the company's operations. Scott Gurvey, NIGHTLY BUSINESS REPORT, New York.