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The Rubber-Band Effect

Traders Magazine, November 1998

Stephen Lacey

The small-cap companies that made it to the secondary market before the initial-public-offering drought, and then survived a stock-market hammering, are now participating in an historic rally.

Against a 21.9 percent rebound in the Russell 2000 index of small-cap stocks, the 462 IPOs issued over the 12 months ending October 31 pared their average loss over offering to 9.88 percent, from 16.59 percent for the 12 months ending September 31. The average performance for IPOs issued for the 12 months ended October, 31 was a loss of about 1 percent.

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