NEW YORK — Investment banks are selling a record number of initial public offerings in advance of the pre-Labor Day doldrums. The only problem: Investors, shaken by declines in stocks in recent weeks, don't want many of them.
"We're seeing a calendar this time of year as strong as it's been in history," said David McMillan, director of capital markets at Lazard Freres & Co. "But the demand doesn't seem to be there."
This week, 28 companies went public, the highest weekly tally since 1996, according to CommScan LLC. The number surpassed last week's total of 25. Yet with the NASDAQ Composite Index down 12 percent and the Bloomberg IPO Index down 10 percent in a month, investors are skittish.
"Once, everything worked," said Dave Robinson, co-manager of Banc One Investment Advisors' $340 million One Group Small Cap Growth Fund. "Now people are not willing to commit capital. We've become a little more selective."
Case in point was America Online Latin America Inc., which completed its IPO this week. The joint venture between No. 1 online service provider America Online Inc. and Venezuela's Cisneros Group. sold its shares at $8 — the low end of the price range underwriter Salomon Smith Barney was seeking to fetch — after cutting that range from $15 to $17.
Vina Technologies Inc. rose just 13 percent on its first day of trading after the phone-equipment maker sold 3 million shares at $12 each, the bottom of the proposed range of $12 to $14. The Fremont, Calif., company originally proposed selling 5 million shares.
Not all IPOs are getting the cold shoulder. McData Corp., a maker of computer-network switches, jumped threefold after its $350 million offering. The company, based in Broomfield, Colo., is 85 percent-owned by EMC Corp., the No. 1 maker of systems for corporate data storage.
What's more, eight biotechnology companies went public, capping the busiest four weeks for biotechnology IPOs.