Not one initial public offering has hit the U.S. markets so far this year, putting January on track to be the slowest month since the recession.
There hasn t been such a lackluster IPO month since December 2008, after Lehman Brothers filed for bankruptcy, Bloomberg reported. The downturn marks a significant departure from recent trends, as the IPO market has been booming over the past few years. January 2015 saw 14 IPOs, according to Renaissance Capital, a global provider of IPO research. There were 170 IPOs last year, and 275 in 2014, Renaissance Capital reports.
Private companies thinking about taking the plunge appear to be holding off. Elevate Credit postponed its planned $76 million IPO earlier this month, citing market conditions, according to Renaissance Capital.
Private companies likely are waiting to see some improvement in the volatile capital markets, said Brendan Connaughton, chief investment officer at ClearPath Capital Partners.
They re looking for a little calm in the storm to bring a deal to the market, he said. Or an up-trending market. And we re just not seeing that.
On a more optimistic note, Connaughton pointed out there s still two months left in the first quarter. Venture capital firms continue to fund companies, he said.
I think there s good funding out there, Connaughton said, and that s buying these private companies more time.
Venture capitalists spent an impressive $27.35 billion on private companies in the Bay Area in 2015, the most since 2000, according to the Money Tree report released by PricewaterhouseCoopers and the National Venture Capital Association. But funding slowed in the fourth quarter. Venture capitalists invested $4.26 billion, down 40.2 percent from the same quarter the year before.
Photo by Associated Press
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