Cramer- "IPO Drought Makes for a Hotter Market"
Enviado: 9/9/2003 13:20"IPO Drought Makes for a Hotter Market"
By James J. Cramer
09/08/2003 12:59 PM EDT
"Don't underestimate the lack of supply as a reason for the good demand you are seeing in the market.
Here it is, the middle of September, and I can't recall another September this quiet. No deals at all, particularly in tech. Normally, right now we would be chock-a-block with IPOs, to the point where people would have to sell stocks in order to buy the new IPOs. Now we don't have enough stock to go around.
The amazing thing, as the Financial Times reports, is that the pipeline for U.S. IPOs is at the best level it has been in a year and I still don't see anything out there that's much to talk about, or sell for.
This lack of supply is playing much more of a role in this up market than you might realize. Without a reason for investors to sell -- meaning, something else to sell for -- many stocks just keep climbing.
And climbing. And climbing.
Maybe by October we will have a new group of deals, but somehow I doubt it. I think that the sheer cost of being public is spooking all but the largest companies from coming public. Between Sarbanes-Oxley and the costs of insurance, the price to pay for being public is the highest ever.
That's not changing. That's a secular change, not cyclical. It could keep the pipe from being full for a much longer time than normal.
Meaning, it's still one more reason I expect Dow 10,000"
(in ww.realmoney.com)
By James J. Cramer
09/08/2003 12:59 PM EDT
"Don't underestimate the lack of supply as a reason for the good demand you are seeing in the market.
Here it is, the middle of September, and I can't recall another September this quiet. No deals at all, particularly in tech. Normally, right now we would be chock-a-block with IPOs, to the point where people would have to sell stocks in order to buy the new IPOs. Now we don't have enough stock to go around.
The amazing thing, as the Financial Times reports, is that the pipeline for U.S. IPOs is at the best level it has been in a year and I still don't see anything out there that's much to talk about, or sell for.
This lack of supply is playing much more of a role in this up market than you might realize. Without a reason for investors to sell -- meaning, something else to sell for -- many stocks just keep climbing.
And climbing. And climbing.
Maybe by October we will have a new group of deals, but somehow I doubt it. I think that the sheer cost of being public is spooking all but the largest companies from coming public. Between Sarbanes-Oxley and the costs of insurance, the price to pay for being public is the highest ever.
That's not changing. That's a secular change, not cyclical. It could keep the pipe from being full for a much longer time than normal.
Meaning, it's still one more reason I expect Dow 10,000"
(in ww.realmoney.com)