Here are the numbers: From January 1970 (the Nixon Administration) into November 2008 (the George W. Bush Administration), the IPO calendar has produced 12,542 IPOs, according to U.S. Securities and Exchange Commission filings.
The 39-year period’s annual average: 321.6 IPOs
(Note: These figures exclude “best effort” offerings, bank conversions, closed-end funds, investment companies and foreign companies offering American Depositary Shares in the U.S. capital markets while their underlying shares are traded on their national stock exchanges.)
During the 12 years of Democratic administrations, the IPO calendar produced 5,173 IPOs.
The annual average for the Democrats’ 12 years: 431.1 IPOs
During the 27 years that Republican administrations were in power, the IPO calendar produced 7,369 IPOs.
The annual average for the GOP’s 27 years: 272.9 IPOs
Time and Money
It’s probably not so much a love affair with a Democratic president, but stock market conditions that have allowed IPOs to flourish under his leadership. On the other hand, it might be. Consider the following:
Since 1929, there have been 40 years of Republican White Houses and 40 years of Democrats in the Oval Office. A recent study claimed a $10,000 investment in the Standard & Poor’s 500 Index during the Republican years would have grown to $12,200 over those 40 years. In contrast, a $10,000 investment in the Standard & Poor’s 500 during the Democratic years would have grown to $300,600 over those 40 years.
Note: The S&P 500 index was created in 1957, but it was extrapolated back to 1923 when the first S&P index was introduced.
Best Love Affair – Bill Clinton
From 1993 (the year the 42nd president took office) through 2000, the IPO calendar turned out 4,892 new issues for an annual average of 611.5 IPOs.
In 1993, bankers priced 820 IPOs and in 1996, they took 874 companies public.
The S&P 500 had a great run:
- Jan. 4, 1993: 435.70 (opening)
- Dec. 29, 2000: 1,320.28 (closing)
- Up 203.0 percent for the eight years
No Love Affair – Gerald Ford
From 1974 through 1976, the IPO calendar priced 55 new issues for an annual average of 18.3 IPOs during Gerald Ford’s presidency.
In 1974, bankers priced nine IPOs and in 1975, only six.
The S&P 500 struggled:
- Jan. 2, 1974: 97.55 (opening)
- Dec. 31, 1976: 107.46 (closing)
- Up 10.2 percent for the three years
Good Republican Love Affair – Ronald Reagan
From 1981 through 1988, the IPO calendar turned out 3,442 new issues for an annual average of 430.3 IPOs during Ronald Reagan’s presidency.
The S&P 500 did well:
- Jan. 2, 1981: 135.76 (opening)
- Dec. 30, 1988: 277.72 (closing)
- Up 104.6 percent for the eight years
The Bush Years – Highs and Lows
From 1989 through 1992, the IPO calendar turned out 1,474 new issues for an annual average of 368.5 IPOs when the 41st president, George H.W. Bush, as in the White House.
The S&P 500 did OK:
- Jan. 3, 1988: 277.72 (opening)
- Dec. 31, 1992: 435.71 (closing)
- Up 56.9 percent for the 4 years
From 2001 through Nov. 7, 2008, the IPO calendar turned out 1,315 new issues for an annual average of about 167 IPOs so far during the administration of the 43rd president, George W. Bush.
And what about the S&P 500?
- Jan. 2, 2001: 1,320.28 (opening)
- Nov. 7, 2008: 930.99 (closing)
- DOWN 29.5 percent for the 7 years, 10 months and 2 weeks of George W. Bush’s presidency.
Of course, past performance is no guarantee of future performance.