NEW YORK -- After a string of disappointing debuts, the IPO market showed signs of life Thursday, with shares of four newly public companies each shooting up more than 20 percent in their first day of trading.
All of the companies -- Realogy, the owner of realty firms Century 21, Coldwell Banker and Corcoran Group; online stock photo provider Shutterstock; Kythera, a developer of shots to treat double chins; and Intercept Pharmaceuticals, which develops drugs for liver diseases -- garnered strong demand from investors. The companies raised more money in their initial public stock offerings than they had predicted, an unusual occurrence over the past few months.
Thursday's action bodes well for the IPO market overall, said Thomas Murphy, head of securities and capital markets for the law firm McDermott Will & Emery.
"Whether the market has full recovered, it's too early to say," Murphy said. "There's always some kind of a tipping point where things start to be in vogue and start to get going again. I hope that's what we're seeing here."
The flop of Facebook's IPO in May had weighed on the amount of money companies were able to raise throughout summer. And about 70 percent of companies that had gone public since late July, including four of last week's six IPOs, have priced at the bottom or below the levels they had expected, according to IPO investment and research firm Renaissance Capital. Other prominent IPOs were canceled, including arcade and restaurant chain Dave & Buster's earlier this month and CKE, the owner of the Carl's Jr. fast-food chain, in August.
Companies may have had more success this week because they kept their expectations low, pricing shares less aggressively, Murphy said.
The largest IPO Thursday was Realogy Holdings. The Parsippany, N.J., realty firm, whose other brands include ERA and Sotheby's International Realty, raised $1.08 billion from its offering. That's third-largest U.S. IPO of the year, according to Renaissance Capital. The company priced 40 million shares at $27 per share, the high end of the projected range. They gained 26 percent to $33.90 in late afternoon trading.
Shutterstock's shares shot up 28 percent to $21.80. The New York-based provider of stock photos and videos sold 4.5 million shares for $17 each -- above its expected range of $13 to $15 -- for $76.5 million in proceeds.
Meanwhile, shares of Intercept Pharmaceuticals climbed 27 percent to $19.03, after pricing at $15 -- the top of its expected range of $13 to $15 -- and selling more shares than expected. The drug developer, also based in New York, develops drugs for chronic liver diseases. It raised $75 million.
Investors also were eager to pick up shares of fellow drug developer Kythera Biopharmaceuticals, whose shares gained 22 percent to $19.52. The Calabasas company raised about $70.4 million, selling 4.4 million shares for $16 each, the top end of its estimated range. It also sold more shares than expected.