Stock market jitters spooked buyers and issuers of initial public offerings in the third quarter, leading to fewer IPOs than were launched in the third quarter of 1996.

Six L.A. County firms went public in the three months from July to September, compared with eight companies for the like period a year earlier. The amount of money raised in the third quarter was less than a quarter of the amount raised in third-quarter 1996.

“The market has been a little less receptive to IPOs compared to 1996,” said Harold Harrigian, a partner at brokerage and investment bank Crowell Weedon & Co. “With the recent volatility in the markets, (buyers) are looking more closely to see that the companies are well financed and have a history that can ensure viability over a long period of time.”

The quarter’s tally was up from the four IPOs launched in the second quarter. Typically, there is an upturn in IPOs as summer ends, Harrigian said.

The quarter might have seen more IPO activity were it not for the fact that Dow Jones Industrial Average peaked at over 8,000 during the late summer, according to Bill Barker, syndicate manager at Wedbush Morgan Securities. This spurred fear among buyers and issuers that a “market correction” was in the offing, he said.

“Any time you get into record territory, people get concerned and become hesitant,” Barker said.

Because of these conditions, institutional investors and other buyers tended to focus on managing their existing portfolios instead of going for new issues, Barker said. As a result, some companies started delaying their IPOs.

Delays have led to an unusually large backlog of new issues, Barker said. Nationwide, there are 198 companies registered with the Securities and Exchange Commision to launch IPOs, as opposed to 92 in November 1994.

Market volatility is also causing businesses to lower their expectations about the amount of money to be raised with their IPOs, Harrigian said.

“There are companies we are working with that would have raised $40 million when the market was less volatile,” he said. “But now we’re going to raise $25 million or $30 million, and maybe make up the rest in a secondary offering a year or so later.”

The six L.A. firms making third-quarter IPOs were Scheid Vineyards Inc., a wine grapes grower; Compass Plastics & Technology Inc., a maker and assembler of plastic products; Signature Eyewear Inc., a distributor and marketer of eyeglass frames; Newcom Inc., a maker and marketer of computer and multimedia products for home PCs; Recovery Network Inc., a provider of information via TV, radio and interactive media to people with mental and behavioral health problems; and Orthalliance Inc., a provider of management services to orthodontic practices.

A total of $112.1 million was raised in 1997’s third quarter, compared with $464.7 million in third-quarter 1996.

That quarter also saw two IPOs that were each bigger than this year’s entire third-quarter volume Univision Communications, the Spanish-language broadcaster, and clothing maker Guess Inc.

The varied nature of the companies launching IPOs speaks to the diversity of L.A.’s business community, Harrigian said.

“You’ll probably always have a potpourri of companies going public around here, as there are so many different kinds of startup companies,” Harrigian said. “The IPOs in the most recent quarter reflect that.”

Early last week, three of the new issues were trading above their opening share price. Recovery Network and Compass Plastics were trading at less than a half-dollar above their opening prices, while Newcom saw its stock trading at well over $15, about 38 percent above its launch price of $9.50.

At the same time, Scheid’s stock price was flat at $10, while Orthalliance was down about 25 cents from an offer price of $12 and Signature Eyewear had gone from $9.50 to just over $8.

As of Nov. 17, Barker counted six L.A. companies that had launched IPOs since Oct. 1. He said there will likely be more, because at least one more company was slated for a mid-December issue and another intended an IPO but had not announced a date. There were nine IPOs in L.A. County in the fourth quarter of 1996.