New | Investors see reason for caution in IPO market amid Alibaba fever

The highly anticipated debut of Chinese e-commerce giant Alibaba Group Holding will come amid the busiest year for initial public offerings since the technology bubble burst in 2000.

Alibaba’s flotation, which could come as soon as September 19, could raise more than US$21 billion and claim Facebook’s title of biggest hi-tech listing. It will usher in a season when plenty of new names sell shares for the first time in the United States.

Returns from listings so far this year have been mixed. Some analysts say large swaths of the market, especially biotechnology stocks, are frothy.

The percentage of flotations coming from money-losing companies has jumped to a 14-year high, according to Jay Ritter, a professor of finance at the University of Florida.

The mixed financial results could dim enthusiasm for some of the hot names coming later this year, including web hosting company GoDaddy, airline Virgin America and possibly burger chain Shake Shack, which has been exploring a listing.

Roughly one-third of the 188 stocks that debuted this year are selling below their offer price. New stocks have risen an average of 19 per cent over the first three months of trading, compared with 36 per cent in 2013 and 23 per cent in 2012, according to research firm Dealogic in New York.