June looks like it’s on track to be the best month for initial public offerings since 1999.
In an afternoon email on Tuesday, Rich Barry at the NYSE noted that this week, 14 companies are looking to go public.
So far, however, 2015 has been a lacklustre year for companies making debuts, with only 82 companies coming to market this year, 40% fewer than a year ago.
As for why the IPO market is heating up now, Barry said that not only does the Fed look poised to raise rates for the first time since 2006, but the overall market looks “relatively healthy.”
Turning from boring to exciting, the IPO market is really starting to heat up as this week promises to be the biggest week of the year for the IPO market with roughly 14 companies slated to go public looking to raise total funds north of $US2 billion. It has been a bit of a lacklustre start for the IPO market, as there have been 82 IPOs this year, roughly 40 per cent below where we were last year. However, June is looking to be one of the biggest months for IPOs in years, with perhaps as many as 34 — the biggest month since 1999. Why is the market finally heating up? The single most important factor is positive returns for investors. With the overall market relatively healthy, IPOs have also done extremely well. A second factor is the feeling that now is a great time to take a company public, before the Fed begins raising interest rates later this year…
And if you’re seeing 1999 and worrying that we’re on the edge of a new bubble or something, keep in mind that if pro-rate 82 IPOs to the rest of the year we’re looking at around 164 debuts in 2015.
Even adjusting for an uptick in the rate of companies going public, we’re not that close to being on pace for more than, say, 200 companies to go public this year.
In 1999, 537 companies hit the market.