InvestWithAlex.com 

When Will The IPO Market Tank?

We have already discussed, a number of times before, why today’s IPO market bubble is reminiscent of the 2000 Nasdaq top (search IPO on the right side).  The question becomes, when will this IPO bubble pop? 

This is rather easy. As soon as the stock market breaks down and begins it’s bear market. Based on our timing and mathematical work that time will arrive shortly. Once the market breaks below 15,000, most of the animal spirits associated with “hot yet highly speculative” IPOs will go out the window. Just as it should. If you would be interested in learning when the bear market of 2014-2017 will start (to the day) and it’s internal composition, please Click Here.

Did you enjoy this article? If so, please share our blog with your friends as we try to get traction. Gratitude!!!


Click here to subscribe to my mailing list

When Will The IPO Market Tank?  Google

When Will The IPO Market Tank Investwitalex

CNBC Writes:Good times roll for IPOs: How long will boom last?

This has been a record year so far for European stock market listings – traditionally a sign that a region’s economy has returned to health.

The average size of fundraisings in Europe this year so far is $259 million, the highest on record, according to Dealogic. With the region’s economy still growing at a relatively slow rate, this is not just about greater confidence in the economy.

(Read more: Is the IPO market in a bubble? )

“First, there was a strong amount of cash available for investors in equities,” Klaus Hessberger, co-head of ECM EMEA at JPMorgan, told CNBC. He advised on the $6.9 billion sale of UK government shares in Lloyds Banking Group, the biggest deal in the region so far in 2014.

“Second, IPOs need some preparation time, usually more than six months – so this was a reflection of a positive market from summer onwards. Third, U.S. equity money is still coming into Europe because of the continued lower interest rate environment and fourth, there was also cash raised for M&A.”

Plenty of action is also driven by private equity groups “clearing out aging investments from their portfolios,” as Maria Pinelli, Ernst & Young’s global vice-chair of strategic growth markets, pointed out. She thinks the first half of 2014 at least will continue to be a good year for the IPO market.

View gallery

Good times roll for IPOs: How long will boom last?

Jin Lee | Bloomberg | Getty Images

With all the cheap money in the system, bankers believe the IPO boom has further to run. There is pent-up demand and a number of appetizing companies waiting to come to the markets.

“There is still some way to go to capture all the liquidity,” as Hessberger said.

In Europe, Goldman Sachs is topping the leaderboard of advisors in terms of value of IPO deals completed, with a market share of 13.6 percent in this year’s deals so far, followed by JPMorgan (9.7 percent) and Deutsche Bank (9.4 percent).

However, it isn’t quite 2006 all over again at investment banks.

There are still risks to continued outperformance, such as worse economic performance, as Hessberger pointed out.

Some of the more recent listings have been less well received, such as Candy Crush game maker King Digital, whose shares fell by 16 percent on their debut. And the most recent Lloyds sale featured a greater discount than the last tranche sold by the UK government.

There are also suggestions that some banks are having to resort to different measures to get in on IPOs, such as observing stricter guidelines against working with particular clients’ competitors and even waiving fees to be listed as part of deals they didn’t work on for existing clients.

The M&A and debt markets have not recovered in the same way. Revenues for these kind of deals are down 6 percent for M&A, and 22 percent for debt capital markets globally, according to Dealogic figures.

While there are a number of big money deals like the Time Warner Cable purchase pushing up M&A figures, the actual number of deals is down 14% compared to 2013 at this point, making 2014 the slowest year-to-date period by number of deals since 2003, according to Thomson Reuters data.

One Reply to “When Will The IPO Market Tank?”

Comments are closed.