Friday, January 4, 2013

2013 may be a better year for IPOs

Market watchers and analysts are expecting 2013 to be better year for initial public offerings after a lacklustre 2012, where only 128 companies raised money via IPOs.

Compare that with the 154 companies that went in for an IPO in 2011 while the long-term annual average is 200.

According to the Daily Ticker, the median proceed raised by IPOs also fell 23 percent while 40 percent of companies ended up worth less than their IPOs.

Investor relations firm KCSA said that 2013 may be a turnaround year though in terms of companies entering the equity markets.

According to the Daily Ticker report - KCSA’s 3rd annual strategic communications survey polled 50 leading securities attorneys whose firms were responsible for 87 percent of major initial public offerings in 2012 and found that things are looking up. More than one-third of respondents said they believe the IPO market will be stronger in the coming year, the highest percentage reported in the poll's history.

Most of those surveyed felt that with the compromise deal on the so-called fiscal cliff things could look up this year as there was a perceived sense of stability.

Last year, sentiments were also marred by a clutch of hyped-up social media stocks, which entered the market with fancy valuations but were never able to hold those prices.

This soured the general climate for IPOs and many companies decided to stay away rather than be subject to the battering that companies such as Facebook, Zynga and Groupon faced.

According to KCSA, 89 percent surveyed said Facebook would cause all social media companies valuations to be lower. Last year 93 percent of respondents said Facebook was the most anticipated IPO of the year while this year 86 percent were unsure.

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