Review of the 2015 U.S. IPO Market

Morrison & Foerster LLP - JOBS Act
Contact

[author:

A total of 170 IPOs were conducted in 2015, according to Renaissance Capital.  $30 billion of gross proceeds was raised in 2015, with a median deal size of $95.3 million—the lowest figures since 2009.  In their 2015 U.S. IPO Market Report, Renaissance attributed these low figures to a number of factors, including Federal Reserve and European monetary policies, poor IPO performance and increased M&A and private market transactions.  2015’s dollar volume declined 53% from 2014, which excludes Alibaba’s $22 billion offering.

Healthcare IPOs made up 46% of all IPOs in 2015, raising $6.7 billion.  This is an increase from 37% in 2014 due to continued heightened activity in the biotech sector.  167 biotech IPOs have been conducted in the last three years, with the average biotech IPO raising 15% more proceeds than in 2014.  There were only 110 non-biotech IPOs conducted in 2015.  Surprisingly, the tech sector dropped 58%, making up only 14% of all IPO activity for 2015, raising $4.2 billion—the lowest figures since 2009.  Renaissance attributes tech’s decline in offerings to an abundance of pre-IPO funding and ongoing disparity between public and private market valuations.  The energy sector also dropped significantly, making up 7% of all IPOs, raising $5.5 billion—a 60% drop from 2014.

2015 also saw the absence of large issuers.  The 10 largest U.S. IPOs raised $9.9 billion, the lowest since 2005.  These IPOs averaged first-day returns of 16% only to follow with average total returns of -15%.  Overall IPO performance has also weakened.  58% of IPOs traded below their offer price, in comparison to 41% in 2014.  The average total return for IPOs in 2015 was -3.8%, negative for the first time since 2011.

Private equity-backed IPOs made up 23% of all IPOs in 2015.  The 39 deals raised $11.3 billion, well below the $25 billion raised in 2014.  Venture capital-backed IPOs made up half of all IPOs in 2015 but only raised $8.9 billion, which is a 35% decline from 2014, excluding the Alibaba IPO.  Eight of 2015’s top ten IPOs had VC funding.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Morrison & Foerster LLP - JOBS Act | Attorney Advertising

Written by:

Morrison & Foerster LLP - JOBS Act
Contact
more
less

Morrison & Foerster LLP - JOBS Act on:

Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide
- hide