IPOs: Low volume, high hopes

The IPO window is closed, but plenty of companies want to reopen it.

Public market volatility is having a measurable impact on IPOs, according to data released today by PricewaterhouseCoopers. It shows that just 20 companies have gone public so far in the third quarter, with no addition offerings on track before Q4 begins. The $3.1 billion raised not only represents a 74% drop from Q2, but also is the lowest quarterly total in three years.

"The quarter is really a tale of two different time periods, because almost all of the activity was in July and the very beginning of August," says Neil Dhar, a partner with PwC's transaction services group. "Things slowed down quite a bit when the debt downgrade came from S&P, because it really spooked the investor base."

On the upside, it seems that companies believe the IPO market will improve… eventually. There have been 75 new registrations filed in Q3, including 25 during the volatile month of August. The most recent S-1 came yesterday, when Texas-based oilfield services company Platinum Energy Solutions filed for a $300 million offering.

"I am a little surprised at the volume of companies going into registration, but it seems to mean that people are thinking more long-term as opposed to short-term," Dahr adds.

Source: PwC

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