The IPO Buzz: Taking a Cue from History

The last two weeks of June closed out the month with a bang. A total of 22 IPOs were priced, according to the U.S. Securities and Exchange Commission (SEC) filings. This excludes unit offerings. And then Old Mother Hubbard’s cupboard went bare.

Consider the following: Last week there were no IPOs and this week looks much the same. The lack of traffic raised a question: “Where are the IPOs?” But not to worry – the answer is found in one word: history.

Let’s flip back to the SEC filings and walk back over the last 10 years. The time span runs from 2008 through 2017 and covers the three-week period around the July 4th holiday – two weeks before Independence Day and the week of the holiday break.

The key to the IPO market is the calendar. This is where history tells the story.

The IPO Traffic

Over the last 10 years from 2008 through 2017, the earliest date that an IPO started trading after the July 4th holiday was on July 7, 2016. The longest wait after the holiday was in 2009 when the first IPO began trading on July 30, 2009.

These records point to July 15th – or around mid-month – as the date when the first IPO typically started trading after the Fourth of July holiday.

Looking at today’s date, July 8th, we’re just a week away from when the IPO action traditionally resumes after the Fourth.

But that’s not all there is to this story.

The IPO Pipeline

In 2018, there is more to IPO life than the trading timetable. The IPO pipeline has been building.

Over the last three weeks, 25 companies filed to go public.

Dipping back into the SEC filings for 2008 through 2017, we see a similar pattern. Over that 10-year period, a total of 159 companies filed to go public in the two weeks before the July 4th holiday and the holiday week, the SEC’s records showed. The heaviest activity was in 2014, when 48 companies filed to go public during that three-week period – and this occurred in a year when 273 IPOs were priced. The lightest activity was in 2009, when only three companies filed to go public during those three weeks around the Fourth – and that was in a year when only 32 IPOs were priced.

The 10-year average was 15.9 companies filed to go public during that three-week span leading up to and including the July 4th holiday, according to the SEC data.

This year, 25 companies filed to go public, which ranks as the second-highest IPO pipeline buildup for this three-week period in recent history.

July’s Third week

This brings us to the week of July 16th. The IPO Calendar was blank at press time. Nevertheless, anything can happen when the SEC’s filing widow opens for business again on Monday morning, July 9th.

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.