Wednesday, July 18, 2007
An Update on the Mega-IPO Success Rate
by Ken Houghton
That may not be true for long (h/t comments at Calculated Risk):
That claim, of course, may still be true.
I posted a while back that there were arguably three successes in the top ten IPO issuances of all time (pre-Blackstone). It was arguable because:
the weakest of which—CIT Group—has a market cap about about twice its IPO
That may not be true for long (h/t comments at Calculated Risk):
CIT Group Inc., the largest independent commercial finance company in the U.S., reported an unexpected second-quarter loss and said it's getting out of home lending. The shares had their biggest drop in almost five years....
Chief Executive Officer Jeffrey Peek decided to quit the home-loan business, which accounts for about 10 percent of CIT's income, after losses rose more than expected and investor demand for mortgages waned. The unit focused on "subprime" borrowers with weak credit or heavy debts, a category where loans are souring nationwide at the fastest pace since 2002.
The loss "blindsided the market," said a report by Royal Bank of Scotland credit analysts including Corinne Cunningham. "CIT has until now claimed to have a subprime book that was better than average."
That claim, of course, may still be true.
Labels: Economics, High Finance, mortgage, subprime, The Old Firm
