Shares of A123 Systems Inc, a maker of lithium-ion car batteries, had the second-best debut of any 2009 U.S. initial public offering, rising 50.3 percent in their first trading session, far outpacing the four other stocks that came to market on a particularly busy day for IPOs.
With two more IPOs set to price on Thursday, including a $960 million deal by Chinese online videogames maker Shanda Games Ltd, the current week could see seven deals and become the busiest since December 2007 for the rebounding U.S. IPO market.
After starting at a 25.9 percent premium to their IPO price, A123 shares closed the day at $20.29 on the Nasdaq in a performance reminiscent of the frothy IPO market of a decade ago, given the company has never made a profit.
The best first-day jump this year was by online restaurant reservation company OpenTable Inc, another venture-backed company, which rose 59.5 percent in its debut in May.
The four other initial offerings that began trading on Thursday did not fare as well as A123, however, showing that investors in the IPO market are still choosy.
There a lot of excitement for the right deal in the right sector, said Francis Gaskins, president of research firm IPO Desktop. But investors are looking at these on a deal by deal basis. The floodgates have not reopened.
Artio Global Investors Inc, the U.S. asset management arm of Swiss bank Julius Baer Holding AG, finished the day up 4.8 percent, while online health supplement retailer and manufacturer Vitacost.com Inc rose above the IPO price in the final minute of trading to close the day with a gain of 0.42 percent. It had earlier slid as much as 9.4 percent.
The two other IPOs, by commercial mortgage REITs, fell in their debuts after both delayed and halved their IPOs earlier this week. Apollo Commercial Real Estate Finance was down 7.5 percent and Colony Financial Inc was off 2.5 percent as mortgage REITs met tepid demand from investors.
Foursquare Capital Corp, a mortgage REIT backed by asset manager AllianceBernstein that was to price on Thursday after markets closed, postponed its IPO indefinitely.
Investors were drawn to A123 because every major global automaker has plans to bring electric vehicles to the market in the next two to three years, said ThinkEquity analyst Michael Lew, who monitors the energy storage sector.
It's a long-term play on the lithium-ion space, Lew added.
Lew also said the warm reception of the IPO would encourage other cleantech companies to tap the public markets.
In addition to Shanda, hospital operator Select Medical Holdings Corp is scheduled to price after the close of markets Thursday.
(Reporting by Phil Wahba, additional reporting by Poornima Gupta; Editing by Steve Orlofsky and Matthew Lewis)