During the U.S. stock market’s wild roller-coaster ride, the phones rang last week. The financial media called IPOScoop.com with the burning question: “How is the stock market’s correction affecting IPOs?” That was an easy one to answer. It isn’t.
School is out.
The IPO market traditionally closes down between mid-August and mid-September. (See The IPO Buzz of Aug. 9, 2015, for details in Last Dance of The Summer.) So that yellow school bus will sit in the garage, waiting for September, while the storm blows down the canyons of Wall Street.
This is the reason why none of the reporting services are offering an IPO calendar at this time. There isn’t one. It is due to seasonal factors – not stock market conditions.
Heavy Traffic, Big Names
In the meantime, the pace of filings – the lifeblood of the IPO market – has been brisk, according to the U.S. Securities and Exchange Commission’s filing window. In August, 25 companies have filed to go public to date with plans to raise over $3.7 billion. That would annualize to 300 IPOs expecting to raise $44.4 billion. Let’s look at the annual IPO traffic for each of the past five years:
- 2014: 385 filings expecting to raise $50.8 billion
- 2013: 269 filings expecting to raise $48.9 billion
- 2012: 152 filings expecting to raise $34.2 billion
- 2011: 290 filings expecting to raise $57.0 billion
- 2010: 271 filings expecting to raise $56.1 billion
Among the August filings were such big names as Neiman Marcus, the 100-year old department store; Petco Holdings, the 50-year old pet store retailer and Pure Storage, a provider of flash memory-based enterprise storage hardware.
But the big question remains: “When does the IPO calendar kick back into gear AFTER a correction, or worse, a bear market?”
There is no answer for that. But looking back in the past (which, of course, is no guarantee of future performance), it usually takes about three to six weeks after the U.S. stock market hits its bottom for the IPO calendar to come to life.
For the 2015 correction: Bookmark the stock market bottom, whether it was on Aug. 24 or God forbid, some future date, and start counting.
Editor’s Note: The IPO Buzz will not be published next week, when the U.S. stock market will be closed on Monday for Labor Day. But the column will return on Sept. 14, 2015.
From IPOScoop.com and its staff, we wish all of our readers a happy Labor Day weekend.
Disclosure: Neither the author nor anyone else on the IPOScoop.com staff has a position in any stocks mentioned, nor do we trade or invest in IPOs. The author and IPOScoop.com staff do not issue advice, recommendations or opinions.