The IPO market has been pretty slow for the past two years due to the effects of a subprime mortgage crisis that turned into a credit crisis that turned into a worldwide financial crisis and recession. Nonetheless, two companies made their debuts Thursday -- one on the NYSE (NYSE: NYX), the other on the NASDAQ -- and they nailed it. Hyatt Hotels (NYSE: H) gave its investors a 12% gain on its first Big Board trading day, and Ancestry.com (NASDAQ: ACOM) switched those digits, jumping 21% in its first day of trading.
Hyatt Hotels overcame two major concerns. The worldwide travel market slump has been tough on hotel companies, and Hyatt has been subject to the same forces as everyone else. Also, investors may have been worried about infighting among the founder's heirs (the Pritzker family), but the double-digit price increase suggests that investors don't foresee Bancroft-style squabbles screwing investors -- or, if you don't like Dow Jones, now a part of News Corp (NASDAQ: NWS), Playboy (NYSE: PLA) makes the same point.
The Pritzkers, together, hold 85% of Hyatt stock, which leaves control of the company squarely within the family. This subset of shareholders also benefited most, as it's where most of the proceeds went. The family will continue to have around two thirds of the company's stock and 75% of its voting power.
Ancestry.com attracted capital with its large subscriber base and strong history of growth, as Tom Taulli explains. The genealogy website realizes that the market is dicey right now, but there's obviously a sense of optimism.
Hyatt and Ancestry.com have obviously resisted a troubling trend: five of the last nine IPOs closed below their offering prices on the first day. Other companies have given up their plans to go public. PlainsCapital was supposed to go Wednesday but put it off, with AEI and Aviv REIT dashed their plans in the past week.
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