Written by Edgar Agents on August 9, 2018
Thanks to our relationship with Audit Analytics, we’re able to bring you this exclusive new research series.
PART ONE: Market Overview
Although the IPO market has been slow over the past several years, we are beginning to see signs of increased activity. In the first quarter of 2018, there were 60 initial public offerings, the highest since 2014 and second highest over the last ten years.
The number of IPOs annually fluctuated between a high of 397 in 2000 and a low of 62 in 2008. During 2017, there were 215 companies introduced through the IPO market.
Not surprisingly, after the global financial crisis, between 2008 and 2009, there was a sharp decline in IPO formation. Some years stand out as outliers, such as 2016 , but it could be attributed to a few factors. In early 2016 the stock market corrected from historically high valuations, causing increased volatility. Additionally, market analysts noted uncertainty associated with the U.S. elections, interest rates and global macroeconomic issues. A less stable market and greater availability of private capital allowed many companies to be more selective with the timing of their IPOs.
Market conditions are a major factor in the success of an IPO. In some extreme cases, negative market conditions may cause a company to postpone the IPO until the market conditions improve. Vrio, a business unit of AT&T, is a recent example of an IPO that got withdrawn citing market conditions.
According to Nasdaqs’ website, at least 19 companies withdrew their IPO applications in the first six months of 2018. The consequences of a withdrawn IPO may include loss of investor’s confidence should a company make another attempt to go public and already incurred costs of the pre-IPO process.
Financial printer Edgar Agents introduced a Success Locked-Fee and Abort & Delay Deferment program to eliminate financial risks for IPO & Reg A+ filings.
NEXT WEEK: PART TWO: The SEC’s concerns