Initial public offerings are occurring at rate that hasn’t been seen since the robust days of 1999 and 2000, according to BusinessWeek Online.
Through April 17th of this year, there were 55 IPOs on U.S. exchanges, an 8% increase from the year-earlier period, according to
Nonetheless, the IPO business has a long way to go before it reaches the chaotic pace of seven years ago. Last year, there were 198 IPOs in the U.S. totaling about $43 billion. By comparison, in 1999, 486 IPOs hit the market and generated $93 billion in proceeds.
Linda Killian, portfolio manager of the
In 1999 and 2000 IPOs were mostly of dot-com and human-genome companies, of which a vast majority have shut down. Over the past 12 months, financials have accounted for 18.8% of IPOs, healthcare companies 17.8%, energy 16.3% and technology 15.8%.
“The fact that financial-services companies accounted for neatly 19% of IPO activity in the past 12 months isn’t a surprise, considering that this sector accounts for more than 20% of the total market,” said Cathy Seifert, head of financial institutions equity research at
In the future, Killian thinks that more private equity issuers will become involved in IPOs. “Buyouts have increased in frequency in 2006, and since the private-to-public turnaround is increasingly short, we expect to see many more of these leveraged offerings, she said.
“As far as the larger environment is concerned, the economic and political landscape is largely benign. A climate of relatively low interest rates and slowing gross domestic product bodes well for IPOs,” Killian said.
The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.