Midstates Petroleum Co Inc's shares closed 15 percent above their offer price, capping a week that saw the US IPO market get a much needed boost with three impressive debuts. The IPO market has been marked by poor pricing, pulled deals and delayed offerings in recent months. IPOs accounted for 11.3 percent of equity capital markets activity in the first quarter, down from 20.6 percent a year earlier, according to Thomson Reuters data.
This week's IPOs signaled a turnaround with shares of technology companies Splunk Inc and Infoblox Inc , as well as luxury bag maker Tumi Holdings Inc soaring on their first trading day.
Midstates shares opened 2 percent above their IPO price. The company had priced its offering at $13 per share, significantly below its expected range of $16 to $18.
Oil and gas companies have found it difficult to attract investors on their debut trading days. Of the 19 energy companies that have gone public in the last year, only Oiltanking Partners opened more than 10 percent above the IPO price.
SandRidge Energy's unit, SandRidge Mississippian Trust II, which also went public this week, opened 4 percent above the offer price.
"Oil & gas companies are extremely risky ... they are exposed to geopolitical conditions, to volatility of fuel prices ... This makes investors wary," said Scott Sweet, senior managing partner at IPO Boutique.