FOMC Meeting Effecting IPOs

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Will the FOMC Meeting Weigh on MDMD and RP?

Last Week $885 million was raised in the IPO market. Although most of the deals reduced their offering price, the capital raised still remains substantial. Today, the market started up due to market strength in Europe. The problems at Hewlett-Packard (NYSE:HPQ) didn’t even send the market red for long this morning. However, this week’s FOMC meeting may loom large for upcoming IPO’s.

This week, Web Media Solutions company Media Mind Technologies (NASDAQ:MDMD) and RealPage (NASDAQ:RP) are slated to trade, and seem to be shaping up to look like flagship deals. Unless of course, the market doesn’t like what comes out of the FOMC meeting. As usual the market should see penny stocks volatile coming out of the meeting.

Barring a disaster though, MediaMind Technologies should trade at decent premium according to some IPO services. RealPage should do even a little better, despite the fact that 7.5 million shares from shareholders are being sold into the offering.

Other deals that look decent are DLC Realty Trust (NYSE:DLC) and the secondary offering of Molina Health (NYSE:MOH), despite the fact that their earnings were shaky. Generally the end of August is light for the IPO calendar, due to the labor day holiday. This will make the calendar look very heay for the next two weeks.

Many of you know that there are too many penny stock newsletters to count. There are also several IPO services that offer early reads on deals. They base their ratings on many factors, but none of these predictions will hold their mud if we see bad news out of the FOMC. On the other hand, good FOMC news could take the hotter IPO’s far beyond previous upside expectations. The beauty of investing is that we never know.

While IPO’s are volatile they are somewhat less risky than investing in hot penny stocks. A main difference is that IPO’s are more subject to market news and volatility in the large cap space. This is why you need to be prepared to perhaps buy quality IPO’s in the aftermarket that have only gone down in price due to the broader markets falling.

While a winning trade in an IPO often offers a smaller return than one in an explosive penny stock, you have to consider the risk factor. This week could provide investors a chance for 20-30% in some offerings and potentially more over the long term, if some of these names trade lower due to fear. Once again, compile your symbols and be ready. We will have more blogs and penny stock alerts this week.

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