By One Measure, Last Week Was the Worst for IPOs in a Decade

Need any more proof that the market for initial public offerings is showing cracks? Look no further than the ten companies that went public last week.

Eight of those 10 U.S.-listed IPOs priced below their expected range, the most in a single week since July of 2004, according to Dealogic. The lower pricing didn’t help the stocks once they began trading either. The average one-day pop for last week’s IPOs was 6.2%, well below this year’s average of 16.2%, according to Dealogic.

High-profile offerings from boutique investment bank Moelis(MC) & Co. and travel-technology firm Sabre Corp.(SABR) sold fewer shares at a lower price than both expected lat week. On the day they debuted, shares of the two companies rose 4.6% and 3%, respectively.

The two companies that sold their shares within their marketed range—China’s Leju Holdings Ltd.(LEJU) and Weibo Corp.(WB)—both opted the day of their offerings to sell fewer shares than planned.

For the first two months of the year, as the broader market struggled, IPOs delivered strong returns for investors. The average gain for IPOs on its first day of trading was nearly 20%.

But beginning last month, stocks of high-flying biotech, social media and cloud-computing companies began taking a beating. The Nasdaq Biotechnology Index tumbled 14% over the past month, and the Nasdaq Internet Index fell 9%.

The turmoil quickly caused investors to pull back from IPOs. Shares of King Digital Entertainment(KING) PLC, maker of the “Candy Crush Saga” mobile videogame and one of the most anticipated IPOs of the year, debuted on March 26 and plunged 16% that day.

Two weeks later, two of April’s biggest IPOs --the $2.4 billion sale of Ally Financial Inc.(ALLY) and the $650 million offering of hotel chain La Quinta Holdings Inc(LQ).–priced shares cautiously. Ally priced at the low end of its expected range, while La Quinta priced below its expected range.

Then came last week, with its series of offerings that fell short. With only a handful of small offerings this week, there’s no immediate catalyst looming that will give a fresh jolt to the IPO market.