The lifeblood of the IPO market is found at the SEC’s filing window, it’s been said time and again. After all, it’s the first step any company takes in going public.
Check Out These Numbers
Last month — December 2009 — a total of 28 companies filed plans to launch their respective IPOs. That far exceeded the three IPO filings in December 2008. And it was more than twice the average December traffic of 12.4 filings during the decade that ran from Jan. 1, 2000, through Dec. 31, 2009. (Some call that decade the ‘00s, others the Oughts or the Zeroes. Some analysts and financial writers have called it “The Lost Decade” with respect to total returns on investments in stocks.)
In the fourth quarter of 2009, a total of 69 companies filed plans to go public. Flip back to the final quarter of 2008: Only seven companies filed to go public.
Consider this: It took all of 2009 for bankers to price 62 IPOs and, in the fourth quarter of 2009 alone, they had added 70 companies to the IPO pipeline.
One might even think that bankers have been seeding the rain clouds for a potential deluge of IPOs in the coming months.
Annual Average IPO Traffic
Now let’s back up and take a look at the average annual IPO traffic for the 2000-2009 decade, and for the last 30 years spanning the decades from 1980 through 2009.
The much ballyhooed “lost decade for stocks” you hear about these days spilled over into the IPO market as well. Its numbers were dramatic, and the issuance of IPOs all but disappeared over the last two years.
For the 10 years from January 2000 though December 2009, the IPO calendar produced 1,823 IPOs, according to SEC filings, or an average of 182 deals per year — less than half the average annual traffic of the last 30 years.
Now for perspective, check out the IPO production line for the last 30 years. From Jan. 1, 1980, through Dec. 31, 2009, bankers priced a total of 11,337 IPOs — or an average of 378 initial public offerings per year.
Partying Before 1999
Let’s take a look at the year-by-year traffic for the past decade. You might want to note the super-busy IPO years did not -– repeat -– did NOT come during the Internet bubble era (1998 through 2000). The heavy traffic came earlier. Consider the following:
- 1996: 874 IPOs were priced
- 1993: 820 IPOs were priced.
- 1986: 728 IPOs were priced.
- 1999: 543 IPOs were priced.
The last item in this list — 1999 — was the frenzied Internet IPO year. Yet it ranked only 10th in terms of annual IPO traffic.
Noteworthy: The two back-to-back “most active” IPO markets were 1996 (874) and 1997 (622) for a total of 1,496 IPOs.
This just goes to show you that you don’t need an Internet bubble to produce an active IPO calendar. It was more active before then.
To reiterate, the SEC’s filing window was a busy place in December and throughout the fourth quarter of 2009. That leads to an interesting question:
Can the IPO calendar be far behind?
If that turns out to be true, the words “Happy New Year!” will be significant indeed.
Disclosure: Neither the author nor anyone else on the IPOScoop.com staff has a position in any stocks mentioned, nor do they trade or invest in IPOs. The author and IPOScoop.com staff do not issue advice, recommendations and opinions.