Global IPO Numbers Anemic in Second Half of 2008

The ongoing financial crisis caused global IPO issuance to come to a near halt in mid-2008, and that steep decline has continued through the end of 2008. A December 2008 report from Renaissance Capital on the state of the global and US IPO market shows some stunningly weak numbers, including:

  • Globally, the average new issue was down 38% by year-end, down 32% in the US.
  • The huge overall drop in issuance caused global proceeds to fall 69% year-over-year.
  • Almost 50% of new issues fell on their first day of trading and aftermarket performance was poor
  • The US went three months without an IPO during the second half of the year, the longest dry spell since the recession of the 1970s, and only a single November IPO prevented the drought from stretching into 2009.
  • After 93 global IPOs in the first half, only 25 companies were able to raise over $100 million in the last six months of the year, down 91% year-over-year.
  • For the year as a whole, the number of IPOs fell 79% to 119 and total proceeds dropped 69% to $81 billion.

On the bright side, the report states that:

There is a lot of pent-up demand by potential issuers to raise equity capital, both in the US, where there are nearly 200 companies in the pipeline, and in major non-US markets. If financial markets stabilize, we believe that many of these companies could test the IPO waters in 2009.

Read Renaissance Capital’s 2008 Annual Global IPO Review (via Federal Securities Law Blog)