With all the industry hype and fanfare about the Dow Jones Industrial Average breaking the 12,000 ceiling last month, it begs the question: Is this just the extra push the moribund IPO market needs to revive itself? The short answer: depends on who you ask. “The underwriters are going to try to push them out now,” predicted James DeStefano, an analyst with Renaissance Capital’s IPOhome.com in Greenwich, Conn. DeStefano reasoned that since the end of the year often sees an uptick in initial public offerings, or the first sale of a company’s common shares to investors, the new Dow number could bode well. “I think we’re going to see more activity,” he said. That could be good news for Simi Valley-based voice and data communication services provider InterMetro Communications Inc., which filed its IPO in mid-May and as recently as late September said it planned to start trading on the American Stock Exchange last month. <!– –> As of Nov. 1, however, the company remained off the market. (Companies cannot speak publicly about IPOs and calls to InterMetro were not returned.) Now would seem like a good time for InterMetro to go public given the glimmering Dow, but DeStefano said the company is hampered by its size just 38 employees and lack of track record in a crowded field of other big name voice-over-Internet providers “Regardless of how the market is doing, I still think it faces some headwinds,” he said. “It’s a very risky company.” DeStefano said successful IPOs tend to come from reputable names poised to grow. “With the strength of the market, especially the Dow, you’re seeing people more interested in putting money behind the developed companies, the fundamental that have growth potential. That’s why Douglas Emmett did well.” Santa Monica real estate investment trust Douglas Emmett has turned into a Wall Street darling since it launched its $1.39 billion in shares last month, the largest initial public offering of a U.S. real estate investment trust on record. The offering price had been placed in the $19 to $20 per share range, but was increased to $21 a share. The company also increased its offering by 20 percent to 66 million shares to meet demand. DeStefano said Douglas Emmett prospered because it is well known, with almost 50 properties and 11.6 million square feet across the country and 12 in the Valley, namely Studio Plaza in Burbank, the Warner Center Towers office complex and the Sherman Oaks Galleria. “If you want to be in the market, they’re the main player,” he said. Still, that size may also make Douglas Emmett the exception to the DeStefano’s theory that now is the time for IPOs to jump in. Charles Rothstein, senior managing director for the Michigan-based global private equity and investment-banking firm Beringea, said despite any record-setting Dow returns, private equity funds remain a better and less regulated alternative to companies looking for funding than going public. “In spite of a soaring Dow, there are other viable financing options which should keep IPO activity muted,” he said. “The sky-high (Dow Jones Industrial Average) is a barometer of market conditions and sentiment, but IPOs are still very difficult to complete.” Dan Genter, president and CEO of the Los Angeles money management firm RNC Genter Capital Management, also questions whether the 12,000 mark will lure more IPOs out of the wings, agreeing with Rothstein that “you’re much better off to sell out to a private equity firm.” That doesn’t mean the Dow’s rise isn’t good news, Genter said. “The best thing about the Dow reaching 12,000 is there’s a lot more buzz about it,” he said. “Success breeds success.” In fact, he thinks the record is just one step in a long series of improvements that will increase IPOs. Until all the stars align, though, Genter says don’t hold your breath. “Now that you have a stable interest market, now you’re in the first place where you’re going to see price-earnings expand,” he said. “Then you will see people start moving back into the public.” Van Nuys Feels Motown Woes The repercussions of Detroit’s ailing auto industry are being credited with dragging down third returns for the Van Nuys wheel maker and auto parts supplier Superior Industries International Inc. The company reported that Ford Motor Co. and General Motors Corp. once some of its biggest clients have scaled back orders on aluminum wheels, causing sales to slip from $178.3 million a year ago to $174.3 million. The losses forced Superior to sell its suspension components operations, close a factory in Tennessee and restructure operations in Van Nuys and Arkansas during the quarter, the company said. In a statement, company president and CEO Steven Borick zeroed in on Ford, GM and DamlerChrysler AG as the culprits. “Superior’s restructuring continues an effort made increasingly urgent by the recent production cuts announced by the Big 3 automakers,” he said. K-Swiss U.S. Sales Down The Westlake Village shoemaker K-Swiss Inc. reported slightly poorer third-quarter profits, which it credited to a softening of domestic orders. Earnings dropped to $21 million $0.59 per diluted share compared to $21.1 million during the same 2005 period. Revenue also fell from $136.7 million last year to $133.1 million. That was partly because of stateside sales, which decreased by 21 percent to $81.7 million, the company reported. International revenue, on the other hand, boomed with a 55 percent increase to $51.4 million. Chairman Steve Nichols in a statement said the disparity between the two sides is “consistent with our previous forecasts,” although he admitted the decline in domestic sales was bigger than anticipated. “We were able to supplement the strength in revenues and backlog in Europe and Asia with better-than-expected margins and at-once orders of our Classic product,” he said. Staff Reporter Chris Coates can be reached at (818) 316-3124 or at [email protected]