October IPO Recap

After a couple of months of sparse debuts and market volatility, did the IPO market finally start getting back to normal in October?

Yes and no.

The month’s 13 debuts were certainly an improvement over September and August, which saw 7 and 8 IPOs respectively, so that’s good news. Unfortunately, 13 is quite meager compared to the performance of the past few years (2014: 26; 2013: 31; 2012: 20). We have to go back to 2011’s mere two IPOs to find an October that yielded less than 20. That’s not so good news.

To further complicate things, this October gave us the largest tech IPO since Facebook… while two issuers withdrew their offerings due to market conditions (Digicel Corp. ($1.8B) and Albertsons Co. ($1.6B)). Ferrari made a big splash, pricing at $982.4M… but not one of October’s 13 IPOs priced above their initial filing range. To close out the month’s mixed bag on a positive note, American Farmland became the year’s sixth REIT IPO, trumping 2014’s total of five, and Healthcare scored its typical bounty, with the sector’s five debuts accounting for more than a third of the month’s total.

We never expected 2015 to match 2014’s record year, but August and September really dimmed prospects further. Thankfully, the current IPO backlog climbed to 71 deals from the prior month’s 65 issuers, although it did dwindle in terms of proceeds, as it looks to raise a mere total of $8.3B compared to the $13.7B seen in last month’s backlog.

Hopefully when November ends, we’ll have even more to be thankful for.