U.S. IPO market on track for slowest month since recession

There have been no initial public offerings so far in 2016.
DEC 03, 2015
By  Bloomberg
Zero: That's how many initial public offerings have started trading on U.S. exchanges so far in 2016. At this rate, January is on track for the slowest month for IPOs since December 2008, when no companies filed after the bankruptcy of Lehman Brothers Inc. Compare that to January 2015, when 19 companies listed on American exchanges. The busiest month in the past eight years was July 2014, when 54 companies started trading. http://www.investmentnews.com/wp-content/uploads/assets/graphics src="/wp-content/uploads2015/12/CI103531125.PNG" The culprit? Whipsawing equity markets have made it challenging to price public offerings. Volatility has intensified, driven by the slowing economy in China, a depressed commodities industry, turmoil in the high-yield bond market and lingering uncertainty around how higher interest rates will affect the financial system. The Standard & Poor's 500 Index has plunged more than 7% to start the year, while the Chicago Board Options Exchange Volatility Index, a gauge of investor nervousness, is back above the troubling level of 20. IPO DELAYED Elevate Credit, the online consumer loans company seeking to raise as much as $80 million in an IPO this week, delayed the offering, citing the “volatile” market. Only three companies are planning to price their offerings in the remainder of this month. Shimmick Construction Co. is aiming for an offering of as much as $81.25 million, Ameriquest Inc. for as much as $80 million and Advanced Inhalation Therapies AIT Ltd. for as much as $10.1 million. Editas Medicine Inc., a gene-editing drugmaker backed by Bill Gates and Google Ventures, plans to raise as much as $106.2 million in a U.S. IPO, according to a Monday filing. The company has not yet set an expected pricing date, according to data compiled by Bloomberg. The last company to debut on a U.S. exchange was China Customer Relations Centers Inc., which raised $9.6 million and started trading Dec. 21, according to data compiled by Bloomberg. MONTHS, NOT WEEKS An IPO market recovery may take a while, said Tom Farley, president of NYSE Group Inc. “They will, by and large, IPO eventually. The question is when,” Farley said in a Bloomberg TV interview at the World Economic Forum in Davos, Switzerland. “It is likely a matter of months, not days or weeks.” Private equity managers expect IPOs this year to fall “significantly,” according to a survey of 26 firms released this week by Ernst & Young and the Private Equity Growth Capital Council. One-fifth of the buyout firms with at least $20 billion under management, and 5% of smaller firms, see a public offering as the most attractive exit route in 2016, as opposed to selling a portfolio business to a company or another private equity firm.

Latest News

LPL adds $600M UBS team in Tennessee
LPL adds $600M UBS team in Tennessee

The firm's latest additions, led by a second-generation financial advisor, are striking out via its Linsco employee advisor channel.

eMoney supports focused financial planning with enhanced needs analysis
eMoney supports focused financial planning with enhanced needs analysis

The Fidelity-owned fintech aims to help advisors connect with mass market and mass affluent prospects with single-goal conversations.

Trump SEC pick Paul Atkins grilled by Democrats in early political test
Trump SEC pick Paul Atkins grilled by Democrats in early political test

The prospective chair of the agency has pledged to shed conflicted interests and "return common sense to the SEC."

Finra moves to boot Alpine Securities, same firm that claims the regulator can’t
Finra moves to boot Alpine Securities, same firm that claims the regulator can’t

'If I were on the side of Alpine Securities, I’d put all my eggs in the federal court,' one attorney said.

CFP Board floats new procedural rules around bankruptcy, misdemeanors
CFP Board floats new procedural rules around bankruptcy, misdemeanors

If approved, the proposed revisions would achieve outcomes similar to the existing process while reducing the burden of oversight.

SPONSORED Retirement plan balances are flourishing. Why are so many advisors missing out on a $3 trillion opportunity?

Participants who receive professional 401(k) advice see higher returns on average, net, than those who don't.

SPONSORED Focus on clients, not compliance – why Gary Corderman found his fit with Farther

This wealth management platform finally delivers on the technology promises other firms couldn't - giving advisors a better way to scale and serve