To find out what the tealeaves say, read the Securities and Exchange Commission filings.

On Dec. 31, 2003, Kinetic Concepts filed S-1 papers with the SEC for an IPO to raise $460 million.

By the end of the week, the various IPO experts whose professional opinions make up the Street Consensus of Opening Premiums (SCOOP) ratings were giving the Kinetics deal a 3-Star rating.

On Monday, Feb. 2, 2004, the company filed a S-1/A amendment, which set the proposed offering terms to price 14 million shares at $27 to $29 each to raise $392 million. The SCOOP rating for the IPO held at 3 Stars.

Fast forward to Monday, Feb. 23, 2004. The company filed another S-1/A amendment increasing the offering’s size to 18 million shares from 14 million shares. Usually such a move signifies a huge demand for the IPO, and increases the SCOOP rating by a notch. Kinetic Concepts’ SCOOP rating was bumped up to 4 Stars.

After the market closed on Monday, Feb. 23rd, bankers priced the deal’s 18 million shares at $30 each -- above the original filing range of $27 to $29 a share.

All one needs to know about the aftermarket performance of an IPO is to look at the IPO’s final offering terms. In the case of Kinetic Concepts’ IPO, the deal was increased by the number of shares being offered and, then, priced above its original filing range.

The stock opened on the New York Stock Exchange on Tuesday morning at $33.50 a share, up $3.50 a share from its initial offering price. The stock sold at a high of $41.50 and closed at $40.40 a share -- up 34.7 percent from its offering price. The stock closed out the week at $40.35 a share -- up 34.5 percent from its offering price.

That was the 20th IPO of February 2004 and the last company to go public during the month. Along the way, bankers raised $4.99 billion. It made February 2004 the second-most active IPO month in over three years. Only last December was busier, when bankers priced 24 IPOs that raised $6.6 billion to end 2003.

The most active month in 2002 was May, when bankers priced 15 IPOs that raised $1.7 billion, according to available records.

The most active month in 2001 was June, when bankers priced 15 IPOs that raised $14.1 billion.

February’s IPO traffic raised 2004’s totals to 23 IPOs that raised $5.45 billion. These figures exclude two unit offerings consisting of common stock and warrants.

Unit offerings are not included in the IPO Scorecard (listed at the end of this publication). The reason is the aftermarket performances of unit IPOs are difficult to track and can be misleading.

Take the following example: A company prices its IPO as a unit consisting of common stock at $5 a share plus warrants at 10 cents each. In past years, the common stock would trade around its offering price of $5 a share and the warrant would trade at about $1 a warrant. The combined aftermarket value of the two securities would be $6 ($5 for the stock plus $1 for the warrant) for an overall gain of 17.6 percent. But the common stock would go into the IPO Scorecard as unchanged and the warrant would go into the IPO Scorecard as up 900 percent. An investor must buy the unit (common stock plus the warrant) and is not given the choice of buying the warrant separately.

Let’s move back to the present. As of Friday’s close on Feb. 27, 2004, the 2004 IPO Scorecard showed great results. Eighteen of the 23 IPOs closed above their initial offering prices and the other five new issues closed below their offering prices. The average gain for all 2004 IPOs was up 22.4 percent each.

The Nasdaq Composite Index, the barometer of the IPO market, closed Friday at 2,029.82, up 1.32 percent from its Dec. 31, 2003, close of 2,003.37.

The Best:
Crosstex Energy (XTXI: chart), a Dallas-based company, which controls and owns a 54.3 percent interest in the general partnership of Crosstex Energy, L.P. (XTEX: chart), priced its IPO at $19.50 a share on Jan. 12, 2004. The IPO closed on Friday, Feb. 27, 2004, at $39.01 a share -- up 100.1 percent from its initial offering price.

Eyetech Pharmaceuticals (EYET: chart), a New York City-based biopharmaceutical company specializing in therapeutic treatment for eye diseases, priced its IPO at $21 a share on Jan. 29, 2004. The IPO closed on Friday, Feb. 27, 2004, at $36.29 a share -- up 72.8 percent from its initial offering price.

The Worst:
GTx (GTXI: chart), a Memphis-based biopharmaceutical company engaged in the discovery of products to prevent and treat prostate cancer, priced its IPO at $14.50 a share on Feb. 2, 2004. The IPO closed on Friday, Feb. 27, 2004, at $11.72 a share -- down 19.2 percent from its initial offering price.

Portec Rail Products (PRPX: chart), a Pittsburgh-based company producing railroad products, priced its IPO at $10 a share on Jan. 22, 2004. The IPO closed Friday, Feb. 27, 2004, at $8.70 a share -- down 13 percent from its initial offering price.