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The Frenzy Over IPOs

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    Renaissance Capital Principal Kathy Smith on the renewed interest in IPOs created by LinkedIn.

  • Duration 4:12
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Share let's get to the IPO of the year easily linked in the shares are up just a day after shares shot to the moon.

On their debut at the New York Stock Exchange where the -- -- Levys are saying that the post was so busy she couldn't get within half a mile of it -- a lot of investors wondering you know.

Is this price 95 dollars when the actual IPO -- the night before was 45 dollars what does it mean should try and get a piece.

Of this one or maybe the next big IPO.

Joining us now Fox Business exclusive captain -- the principle of Renaissance capital an IPO investment advisory firm.

You can't an IPO there are people who were -- Get an conflicted but that couldn't.

It is hard to get enemies -- especially one of that size it's kind of a small IPO went on the overall with that scale by peers they're -- a number of shares that were put out there was so limited they weren't limited and there's just so much interest in social networking and so this one is one of the first of many social.

Networking companies over -- So I think that this one had that real squeeze that made it very difficult for investors to -- that you've been around the block you've seen IPOs come and go with the past guests on Linkedin because so much from them frenzy surrounding this IPO.

Does it come down a couple months or do you think that this is more like the Google of the world.

It is going to be an IPO it could be a Google but it will have to have to evolve a little bit in its life and I think.

Really what we're saying is the beginning of the squeeze the supply demand squeeze that's happening.

And the fundamental investors haven't yet taken hold of the stock.

We think that it'll be pretty volatile for a couple weeks before it settles and they're -- that might be connected in some way with what the future returns from the company remind people that insiders people who work there have shares they're dying to get rid of so they can cash in at least some of the money.

-- that's called a lock up period when it expires.

Will we see the stock goes down.

Often stocks to trade down ahead of their lock up expiration can actually.

Between now 180 days it's a good time for an investor to take a look at this because they'll be those kinds of volatility.

That might make an opportune time for an investor to command we think it's a good company the question is.

What is the right price for this company there were 48 tech IPOs last year but in 1990 time they were more than 300 of them.

So can we really say that were returning to the dot com -- explosion of the bubble and then a subsequent implosion or is this much calmer time.

We are coming off that basically Death Valley Days for the IPO market as we went through the financial crisis we're now getting back to more normal times I think this year we'll turn out to be a very strong year 2011.

But it's only going to be about half the levels of that Internet bubble about Chinese IPOs Rand -- dang day.

I I -- something in the New Yorker Magazine that a lot of these Chinese companies.

They find shell companies in America -- property they have no earnings no revenue you gotta be careful just because something's attached to -- Chinese name doesn't mean it's a safe -- correct you have to be careful the accounting has been an issue but there are some good Chinese IPOs that are worth looking at an -- fund we -- Yoko.

Which is the Chinese -- too.

And we think that that's a very good -- so it's worth looking at them and making sure that the governments in the accounting is yes exactly.

Exactly and at the end with -- with the IPO idea.

Just an individual get in.

Not necessarily on Lincoln because of what was so small but something else can can the average -- collect up there participate or is this a big boy's game this is a challenge for even the big boys and for individuals with -- like Lincoln.

-- way to do it would be you can purchase individual shares for the full service broker we run an IPO funds so an investor can go to fund managers like ourselves or other IPO related fund managers what's one on the horizon you're really looking out for.

Well I think investors should look at one on the calendar called -- -- which is they basically the Google of Russia.

Worth a look watch for the Russian oriented things that may be associated with that but a very interesting one is -- -- again next week and it'll trade on the -- -- It will trade it should I believe a billion dollar write you OK all right we'll be watching -- Kathy Smith of Renaissance capital thank you so much thank you.

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