Taking Stock of the IPO Market
IPOs that “once took seven months to go from announcement to trading are now taking less than 50 days,” according to reporting by Bloomberg. Data compiled by Bloomberg shows a nearly 80 percent reduction, since the beginning of 2015, in the average IPO timeline. This streamlining is largely attributed to the SEC’s July 2017 decision to expand a popular JOBS Act benefit to permit all companies, not just smaller companies known as “emerging growth companies,” to submit draft registration statements relating to IPOs for review on a non-public basis.
While IPO timelines are down, it is interesting to note that the confidentiality of SEC filings has not stopped word of forthcoming IPOs from leaking out to the mainstream press. For example, a recent Bloomberg headline reads, “Dropbox Files Confidentially for U.S. IPO,” and a recent article in The Wall Street Journal begins, “Spotify AB has confidentially filed paperwork with the Securities and Exchange Commission to list its shares on the New York Stock Exchange, according to a person familiar with the listing.”
Looking at broader trends in the IPO market, “after a very lackluster 2016, we definitely saw a return to normalcy but without a lot of the marquee deals investors were expecting,” according to one analyst quoted in a recent article in The Wall Street Journal. The same article states that “U.S. IPOs raised $49.33 billion through 189 offerings in 2017, more than double 2016’s levels, when $24.2 billion was raised through 111 offerings.”