Quietly, IPO market is staging a rally

The initial public offering market is alive and well, surging to its highest level since 2007, according to a report from Ernst & Young LP released today.
JAN 20, 2011
The initial public offering market is alive and well, surging to its highest level since 2007, according to a report from Ernst & Young LP released today. For the quarter ended Sept. 30, there were 133 companies in the IPO pipeline, a 9% increase over the second quarter when there were 112 companies set to go public. IPOs for technology companies and Chinese businesses fueled the increase in the third quarter, Ernst & Young said. Total dollar volume grew by 4% to $26.4 billion. Nevertheless, the average deal size during three-month period, which saw 33 companies go public, declined by 12% from the previous quarter, to $198 million. The reduced deal size reflects an appetite for smaller-company IPOs, according to the report. The numbers tell the tale. Of the companies registered in the third quarter, 70 were seeking to raise $100 million or less. In the second quarter, only 59 companies were looking to pull in $100 million or less. Of the 19 foreign companies registered to go public, 16 are from China; all those are looking to raise $100 million or less. “We saw a surge in international registrations this quarter, especially from Chinese companies,” said Maria Pinelli, Americas director of strategic growth markets at Ernst & Young. By industry, tech companies represented 21 of the third quarter registrations, and 11 of the IPOs during the quarter were for technology outfits. The third quarter numbers recall the heady days on Wall Street before the financial markets imploded. In the third quarter of 2007, for example, there were 151 companies, worth a total of $30.4 billion in the IPO pipeline. The average deal size of the 26 companies that went public in that quarter was $201.5 million. A year ago, there were just 34 companies in the IPO pipeline. All told, those companies were aiming to raise less than $11 billion.

Latest News

Warren and Wyden press FINRA on ACATS transfer fraud gap
Warren and Wyden press FINRA on ACATS transfer fraud gap

Senators say brokerages leave accounts exposed to fraudulent transfers without verification, intensifying pressure as FINRA weighs its own fraud-hold rule

Forbes advisor list update: Morgan Stanley drops it, owner says changes are coming
Forbes advisor list update: Morgan Stanley drops it, owner says changes are coming

Meanwhile, the founder of advisor list gives reasons for secret $6 million payment to editor.

U.S. Bank names chief private banking officer for wealth unit
U.S. Bank names chief private banking officer for wealth unit

Internal C-level promotion comes as US Bank builds out private banking, athlete-focused advice and alternatives infrastructure.

Why planning is the only strategy that holds in every market
Why planning is the only strategy that holds in every market

A structured financial plan doesn't just prepare clients for the future, it transforms how they respond to the present.

Gemini, Apex deal reflects prediction markets move towards mainstream retail investing
Gemini, Apex deal reflects prediction markets move towards mainstream retail investing

Regulated prediction markets for retail brokerage clients is the latest sign that prediction markets are entering the mainstream investing toolkit.

SPONSORED Direct indexing webinar targets tax-loss harvesting amid market swings

Northern Trust’s Ken Lassner shows advisors how to convert volatility into after-tax portfolio gains

SPONSORED Who builds the income when the pension disappears?

Dan Biagini of American Equity says the steady decline of pensions, longer lifespans and a reset in interest rates are rewriting how advisors build retirement income