IPO Markets in 2008, Worst in Decade

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It is no secret that the IPO market has gone to hell in a hand basket.  How many deals have we had since summer in the U.S. and abroad?  One real IPO came and couple re-IPO’s hit here in the U.S., and volume has been dangerously thin elsewhere.  A new year-end update from Ernst & Young outlines the case that IPO’s have fallen by more than half from 2007.  This may even be the worst IPO year since 1995.

E&Y said there have been 745 IPO’s in the first 11 months of 2008which raised $95.3 billion, down from 1,790 IPO’s and $256.9 billion inthe same period in 2007.  And that just about does it for 2008.  Wehave very few periods of time in where there are a flood ofdeals after the second week of December.

This follows a record 2007 where 1,979 deals were done globally withproceeds of $287.1 billion.  We are also seeing major withdrawals.E&Y noted a Dealogic piece saying 298 IPO’s have been postponed orwithdrawn, far higher than the 167 for the same period last year.

While emerging markets always have prospects, E&Y noted that theBRIC countries of Brazil, Russia, India, and China saw 163 deals valuedat $28 billion done in the first 11-months of 2008.  That is down massivelyfrom 365 IPOs valued at $106.8 billion for the same periodin 2007.  Asian IPO’s have led the group in capital raised so far thisyear at $29.7 billion, and about 60% of that was in China.

We cover as many aspects of IPOs, which has been a challenge as oflate.  We have gone through the proverbial drought in new offerings.Even secondary offerings have been slow.  The good news is that youshould start to see some companies slide in a S-1 filing if the marketsremain stable going into the year-end.  There are also still dozens anddozens of SPAC’s which have yet to find proper acquisition targets.

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Jon C. Ogg
December 9, 2008