Dismal December for U.S. IPO market closing out 'solid' year

E&Y report forecasts 2013 new issue calendar to look like 2012's

Dec 12, 2012 @ 3:04 pm

By Liz Skinner

December could be the slowest month for initial public offerings in the U.S. since 2008, when the nation's financial system was near collapse, according to a new Ernst & Young LLP report.

Five companies withdrew their offerings in late November, and during the first 11 days of December, there was only one IPO, that of Western Gas Equity Partners LP (WGP), according to Ernst & Young's U.S. IPO Pipeline Analysis.

Yesterday, SolarCity Corp. was supposed to have become the second firm to begin offering its shares to the public this month, but it delayed its 10.1-million-share offering — the company priced its shares at $8 each today. Three other firms are scheduled to price this month.

“November and December have been a little challenging,” said Jackie Kelley, Ernst & Young's Americas IPO leader. “Post-election and fiscal cliff issues are contributing to the slowdown, which will probably continue into early 2013.”

Overall, 2012 was “solid year” for IPOs and an improvement over 2011, according to the report, released yesterday. About 130 IPOs raised $45 billion through Dec. 7, compared with 124 IPOs raising $40 billion in all of 2011.

Of course, that includes the $16 billion Facebook Inc. (FB) offering in May, which, for better or worse, was the nation's third-largest IPO ever. Facebook shares that priced at $38 are now trading for about $28. Shares of the social-networking firm have traded as low as $17.55.

“Overall, dealwise, we've had more activity in 2012 than in 2011, which is fabulous, considering we've had eurozone turmoil, Hurricane Sandy, the presidential election and the fiscal cliff,” Ms. Kelley said.

Next year's IPO market is expected to be similar to 2012's, according to the Ernst & Young analysis. Fiscal cliff resolution and a strong retail season could give a boost to the IPO pipeline during the waning days of 2012 and in early 2013, the report said.

0
Comments

What do you think?

View comments

Recommended for you

Featured video

Events

The power of automation

With good data and great workflow processes, advisers can outpace the competition. Junxure's Robert DeFrancis offers some strategies for success.

Latest news & opinion

Meet our 2017 Women to Watch

Introducing 20 female financial advisers and industry executives who are distinguished leaders, advancing the business of providing advice through their creativity and hard work.

Raymond James executives call on industry to keep broker protocol

Also ask firms to pay for the administration of the protocol to 'ensure its longevity and relevance.'

Senate committee approves tax plan but full passage not assured

Several Republican senators expressed reservations about the bill, and the GOP cannot afford too many defections.

House passes tax bill, focus turns to Senate

Tax reform legislation expected to have more of a challenge in upper chamber.

SEC enforcement of advisers drops in Trump era

The agency pursued 82 cases against advisers and firms in fiscal year 2017, down from 98 the previous year.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print