Your source for the latest Breaking News plus Local, Business, Sports, Entertainment & Video News for Southern New Jersey

default avatar
Welcome to the site! Login or Signup below.
Not you?||
Logout|My Dashboard
AAA  May. 11, 2013
Why so few IPOs?
  •       Text Size    
  •       AIM Article
  •       Share Article

Remember the Facebook IPO a year ago? It was supposed to be the big winner in a wave of social media initial public stock offerings. That didn't happen.

Since its disastrous May 2012 market debut, only 139 companies have begun trading for the first time. That is the lowest 12-month tally since the one ending in May 2009, when the economy was in recession. From 2004 through 2007, there were roughly 200 IPOs every year.

"Investors aren't completely comfortable with stocks," says Kathleen Smith, chairman of IPO research firm Renaissance Capital. "And when they're cautious, they're even more so with IPOs."

The first four months of 2013 weren't encouraging either. Assuming the pattern holds, 132 companies will raise just $33 billion for the whole year, the lowest dollar tally since 2009.

Still, the IPO numbers are volatile and the pace may pick up. Smith is hopeful. She notes that 13 companies were scheduled to go public this week, the most in five years. Drug researcher Quintiles Transnational raised $947 million in its debut Thursday.

What's more, IPOs also are looking like better bets for investors lately. Sure, Facebook is down 30 percent from its first day of trading. But the FTSE Renaissance IPO Composite, an index created by Renaissance to track companies that have gone public in the past 24 months, is up 15.4 percent in 2013, nearly 1 point higher than the Standard and Poor's 500. That is the first time IPOs have beaten the S&P 500 in three years.

Associated Press
Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.