The IPO Buzz: January by the Numbers

One of the biggest hits of 1923 was “Yes! We Have No Bananas.” Just one week into 2019, the IPO Calendar reads the same: “Yes! We have no IPOs.”  But this is a seasonal factor. It takes two major elements to pull a calendar together: The IPOs and the U.S. stock market.

Looking back over the past 18 years from 2001 through 2018, the January IPO Calendar has turned out 148 IPOs, according to the U.S. Securities and Exchange Commission filings. That works out to be about eight IPOs per month.

The IPO traffic reflects the health of the stock market. Let’s take a look.

From High to Low

The most IPOs priced in January during that 18-year period were 18 deals in 2018, when the stock market was good.

Consider: The NASDAQ Composite Index closed on Dec. 29, 2017, at 6,903.39, up 8.2 percent from its previous closing low of 6,380.16 on Sept. 26, 2017. That was an OK performance.

Fast forward eight months. The NASDAQ surged to 8,030.04 on Aug. 28, 2018, up 25.9 percent from its low in September 2017.

The flip side of the January IPO Calendar is a sad song indeed.

For the years 2003, 2009 and 2016, there were no IPOs priced during January.

Let’s revisit the stock market to put it in context:

  • Jan. 1, 2003: The NASDAQ had closed on Dec. 31, 2002, at 1,335.51, down 28.3 percent from 1,862.02, its previous closing high, on April 1, 2002.
  • Jan. 1, 2009: The NASDAQ had closed on Dec. 31, 2008, at 1,577.03, down 35.7 percent from 2,453.67, its previous closing high, on Aug. 14, 2008.
  • Jan. 1, 2016: The NASDAQ had closed on Dec. 31, 2015, at 5,007.41, down 2.9 percent from 5,156.31, its previous closing high, on Dec. 1, 2015.

But that was only the beginning. On Feb. 11, 2016, the NASDAQ closed at 4,266.84, down 17.3 percent from its high.

The theme of this story is clear. When the stock market is good, there will be an IPO Calendar. When the market is bad, there won’t be an IPO Calendar.

The Waiting Game

It takes a little time for things to come together. It comes as no surprise to seasoned IPO professionals that we’re still waiting for the curtain to go up on 2019.

The stock market’s year-end performance is the reason why IPO bankers are playing the waiting game. On Dec. 31, 2018, the NASDAQ closed at 6,635.28, down 18.2  percent from 8,109.69, its previous closing high, on Aug. 29, 2018.

For the week of Jan. 7th, the IPO Calendar is as clean as the sand on Horseshoe Bay in Bermuda. But anything can happen when the SEC’s filing window opens again for business on Monday morning.

Stay tuned.

Disclosure: Neither the author nor anyone else on the staff has a position in any stocks mentioned, nor do we trade or invest in IPOs. The author and staff do not issue advice, recommendations or opinion.