When Chicken Little proclaimed “the sky is falling,” she squawked before she got the facts. That’s a lot like today’s doomsayers’ pronouncement that the IPO market is bad.

But the facts tell a different story for the summer of 2004. Instead of doom and gloom, the IPO market smiled on some investors. For them, it was a summer of found money.

For the overall stock market, however, this was a summer to forget. The Nasdaq Composite Index, the barometer of the IPO market, lost 7.48 percent from June 1 to the end of August.

Nasdaq on a slippery slope

The Nasdaq closed on August 31 at 1,838.10, down from 1,986.74 on May 28. Along the way, it hit two 2004 closing lows in August. The Nasdaq hit bottom for the year on Friday, August 6, and then again on Thursday, August 12, when the Nasdaq closed at 1,752.49 – down 11.8 percent from its close on May 28.

More significantly, when the Nasdaq bottomed out for the year on August 12, it was down 18.6 percent from 2,153.83, its 2004 closing high set on January 26. The Nasdaq came within a whisker or two of falling into a bear market.

During August, the price of U.S. crude oil continued to set new records almost every day in a run that took it close to $50 a barrel. On Friday, August 20, U.S. oil futures peaked at $49.40 a barrel, the highest price since oil futures started trading on the New York Mercantile Exchange in 1983.

Busiest IPO summer in four years

This type of stock market action doesn’t make for a hot IPO calendar. Or does it? During June, July, and August, bankers priced 74 IPOs, according to available records, raising $14.3 billion. That was the busiest summer since 2000, when bankers priced 150 IPOs and raised $27.5 billion.

But those numbers didn’t keep Chicken Little and her imitators in the financial pressfrom pecking at their chest feathers and squawking some more.

Many claim the IPO market slows down during the summer, calling it “the summer doldrums.” This is another example of Chicken Little thinking before she gets the facts.

Since 1970, the summer months of June, July, and August have tended to produce an “above-average” number of IPOs, available records show. Yes, that’s right, an “above-average” number of IPOs.

From 1970 to 2003, bankers priced 3,196 IPOs during the summer months – 27.6 percent of the 11,492 IPOs priced from January 1970 through December 2003. An “average” three-month period produces 25 percent of a year’s total IPOs.

The busiest summer in the last 35 years occurred in 1986, when bankers priced 248 of the year’s 728 IPOs. That amounted to 34.1 percent of 1986’s IPO traffic.

The slowest summer for the last 35 years was in 1974, when bankers priced just one of the year’s nine IPOs. That amounted to 10 percent of 1974’s IPO traffic.

The average number of IPOs priced during June, July, and August from 1970 through 2004 was 90.4 new issues. This year’s 74 placed it at No. 19 on the list of 35, or just a smidgen below “average.”

But 2004 was still a great summer.

As of August 31, 49 of the summer’s 74 IPOs closed above their initial offering prices. The other 25 IPOs closed below their initial offering prices.

The average gain, from their initial offering prices to their closing prices on August 31, was 8.11 percent. The Nasdaq Composite Index lost 7.48 percent over the same time span. So, when the facts are examined in the light of day, it’s not a bad performance for the IPO market.

And then, of course, there was the Google factor (see "IPO Watch: Google's Slippery Start,""IPO Watch: Pop Goes the Google").

IPO winners and losers of summer 2004

Now, let’s take a look at the winners and losers of the summer of 2004.

The top three performers:

Greenfield Online, a Wilton, Connecticut-based Internet survey provider of solutions for the marketing research industry, priced its IPO of 5 million shares at $13 each on July 15. The IPO closed on August 31 at $20.71 per share – up 59.3 percent from its initial offering price.

Kanbay International, a Rosemont, Illinois-based global provider of information technology services and solutions for credit card issuers, commercial and retail lending institutions, securities and investment management firms, and insurance companies, priced its IPO of 7.15 million shares at $13 each. The IPO closed on August 31 at $19.91 per share – up 53.2 percent from its initial offering price.

NAVTEQ, a Chicago-based provider of digital map information for automotive navigation systems, mobile navigation devices, and Internet-based mapping applications, priced its IPO of 40 million shares at $22 per share on August 5. The IPO closed on August 31 at $32.88 per share – up 49.5 percent from its initial offering price.

The worst three performers:

KongZhong, of Beijing, provides advanced second-generation wireless interactive entertainment, media, and community services, to customers of China Mobile Communications. KongZhong priced its IPO of 10 million American Depositary Shares at $10 each on July 7. The IPO closed on Aug. 31 at $5.65 per share – down 43.5 percent from its initial offering price.

InfoSonic, a San Diego-based distributor of wireless handsets and accessories in the United States and Mexico, priced its IPO of 2 million shares at $6 each on June 16. The IPO closed on August 31 at $3.94 per share – down 34.3 percent from its initial offering price.

NetLogic Microsystems, a Mountain View, California-based semiconductor company developing processors for advanced networking systems, priced its IPO of 5.78 million shares at $12 each on July 8. The IPO recently sold at $8.24 per share – down 31.3 percent from its initial offering price.

Unlucky Friday the 13th

Nevertheless, there were a few negatives in the summer of 2004. Bankers postponed the pricing of 19 IPOs and withdrew plans to bring 17 companies public.

The busiest week for postponement and withdrawal traffic was for the week ending Friday, August 13, when bankers postponed seven IPOs and withdrew plans to bring five companies public.

Earth to Chicken Little

On a more positive note, from May 31 through August 31, bankers filed plans to bring 79 companies public, hoping to raise $16.7 billion.

But there’s more.

During the first week of September, bankers filed plans to bring seven companies public. They hope to raise $1.3 billion.

After examining the facts, the IPO market doesn’t appear to be in such bad shape. The pipeline keeps growing. And the proposed IPO volume of $18 billion isn’t exactly chicken feed.

Listen up, Chicken Little.