The Wall Street Journal had a blog post yesterday afternoon highlighting the largest IPOs in history, apropos since GM is about to re-enter the market.

Some of the dates they noted stuck out as being meaningful.  As we can see from the chart below, some of the largest offerings appeared curiously close to market peaks.  A special kudos goes to Blackstone in particular (#7 on the chart below) - it's always curious why folks line up to buy when it's the smartest money in the room eager to sell to them.

It's hard to decipher market movement after some of them on the chart, so the table below highlights the S&P 500's performance after the IPOs.  The table is ordered from the largest offering (Visa) to the least-largest (Lucent).

We can see from the table that optimism tended to rule on the day of the share offerings, with the S&P showing a positive return 69% of the time.

But the day after, we suffered a hangover more often than not, with only 25% of the days being positive and a largely negative median return.  That negativity persisted in the short-term, and while the market climbed back a few times over the next 1-3 months, we still saw average returns well below what random periods gave.

One might suggest that the returns are negative because they're kind of clustered around only a few distinct time periods, mostly leading up to bear markets.  But that's kind of the point - when bankers (and by proxy, investors) are feeling so confident that they can swing these huge deals, usually the market environment has been very welcoming.  Too welcoming.