As we approach Halloween, summer is starting to seem like a long time ago. But fiscally, the third quarter only closed at the end of September, and the markets couldn’t be happier about that.
July and August saw the slowdown that’s typical during the year’s warmest, most vacationy months, with deal count dropping to 218 from the previous quarters 306. And yet, thanks to Alibaba’s record-breaking debut in September, the quarter closed on a strong note and actually saw a nearly 50% increase from Q3 2013. Not coincidentally, the Consumer Services sector raised the most proceeds in Q3 – Alibaba’s haul alone consisted of nearly 30% of all proceeds on the period – with Financials as the runner-up.
Despite Alibaba’s scene-stealing debut, IPOs only accounted for 25% of the Q3 deal count. Follow-ons dominated the activity, accounting for nearly 45% of the quarter’s deal count.
As such, it seems like a good time to explore follow-ons, which we do in our Quarterly US New Issuance Recap for the quarter ending September 30. The recap explores whether there is an optimal time period from IPO to first follow-on by examining price performance between an issuer’s debut and the time of its first follow-on. Ipreo’s analysis shows that issuers have been waiting any time from 85 to over 1500 days before offering new shares (361 days on average), and that price performance after IPO can affect that timing. The better the IPO performed, the more likely the issuer would launch the follow-on within 150 days, but that is not the only factor…
Get a lot more information and analysis on follow-on timing, as well as further data on the new issuance market as a whole, and snapshot of Mutual Fund Flows, in the full Quarterly Report on Ipreo Ink.