The US IPO backlog hasn’t been this long in four years. That’s the latest from FT.com, which notes an increase in deal withdrawals in a year where LinkedIn and Pandora were able to excite investors (at least temporarily). There are plenty of companies eager to go public, but the conditions don’t yet support such a move. So, they wait.
FT.com reports that 146 companies have filed for IPOs in the US, with an eye to raise $28.4 bn in capital (according to data from Dealogic). The number of companies waiting to go public hasn’t been this long since 2007. A year ago, pent-up value was higher ($44.6 bn), even though the list was shorter (142 companies).
To really understand these numbers, however, you need to look at what 2011 almost became. Last year, there was much more unrealized demand for IPO capital than there is this year, and the number of companies that filed and waited were roughly the same. At the beginning of 2007, though, the IPO action was hot, indicating that we’d be able to alleviate the pressure in the pipeline a bit.
2011 was supposed to be a record year for IPOs, not the IPO pipeline.
Yet, here we are – in the most pent-up September in 20 years (2008 was the previous high). There are 215 companies that filed and either withdrawn or deferred. That translates to $44.1 bn in capital that hasn’t been raised.
What’s interesting in all this is that companies are still filing. For the IPO market, this means that potential issuers aren’t looking (or settling) for alternatives to an IPO. They are even indicating intentions to go public at some point in the future, and by filing for IPOs, they are investing in this end-game. Patience, rather than despair, is called for.
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.