U.S. IPO Market Shows Signs of Recovery

PricewaterhouseCoopers’ US IPO Watch has some encouraging news for businesses: In the third quarter of 2009, initial public offerings (IPOs) in the U.S. boasted the highest quarterly proceeds and number of deals since the first quarter of 2008.

According to PricewaterhouseCoopers’ Transaction Services practice, U.S. IPO volume hit its low point in the first quarter of this year. The volume of deals increased in the second quarter of this year and continued to rise in the third.

A quarter-over-quarter comparison of the number of IPOs is also positive. In the third quarter of 2009, there were 20 IPOs that raised $5.8 billion-nearly four times the $1.5 billion raised by IPOs in the third quarter of 2008, and almost double the number of IPOs listed in the third quarter of 2008.

Based on the recent growth, PricewaterhouseCoopers’ Scott Gehsmann predicts the number of IPOs in 2009 will surpass the 57 IPOs in 2008. “Third-quarter IPO activity is historically slow; however, we are encouraged by the deal flow and proceeds raised in 2009, clearly building upon improvements that began in late March,” said Gehsmann.

Gehsmann said other encouraging signs include an increase in registration and pre-registration activity-all pointing to a growing pipeline of deals.

Will the activity translate to smaller firms? Writing in The Boston Globe recently, D.C. Denison cited some encouraging news, including a speech in which Robert Greifeld, chief executive of the stock exchange company Nasdaq OMX Group, said he has seen “a recent surge in IPO applications.”

Denison also quoted Paul F. Deninger, vice chairman of the global securities and investment banking group Jefferies & Co., who said his firm is actively talking to several companies on both coasts about going public. “Institutional investors are crawling out of their cave, looking for profitable companies that have strong growth,” Deninger added. “The IPO market is one place where you find young companies that are growing fast.”

* * * * *

About the Author: Rieva Lesonsky is CEO of GrowBiz Media, a content and consulting company that helps entrepreneurs start and grow their businesses. A nationally known speaker and authority on entrepreneurship, Rieva has been covering America ‘s entrepreneurs for nearly 30 years. Follow her on Twitter @Rieva and visit SmallBizDaily to read more of her insights on small business.

1 Comment ▼

Rieva Lesonsky Rieva Lesonsky is a Columnist for Small Business Trends covering employment, retail trends and women in business. She is CEO of GrowBiz Media, a media company that helps entrepreneurs start and grow their businesses. Visit her blog, SmallBizDaily, to get the scoop on business trends and free TrendCast reports.

One Reaction
  1. While an increase in IPO activity is definitely a positive sign, the economic recovery is going to be a slow process. Everyone needs to keep working hard and we’ll get this ship sailing again.