By Rob Starr, Content Manager, Big4.com
According to IPO Watch, a quarterly and annual survey of IPOs listed on U.S. stock exchanges by PwC US, the IPO market began robustly in the fourth quarter, with October IPO volume equaling that of March – both months were the highest of the year with 21 IPOs. IPO proceeds during October reached the second-highest monthly level of the year, after May, which included the Facebook IPO. IPO activity began to retreat in November as investors turned their attention to the Presidential election and fiscal outlook.
“Following a very strong October, companies began to take a more cautious approach given the presidential election, uncertainty of the Congressional budget negotiations and the fiscal cliff,” said Henri Leveque, leader of PwC’s U.S. Capital Markets and Accounting Advisory Services. “Still, the 2012 IPO market surpassed the prior year on the strength of several larger offerings and opportunistic moves by smaller companies looking to tap the public markets when windows opened.”
IPOs continued to outperform as a sector in the fourth quarter, with stock price gains exceeding broader equity market returns. On a quarter-to-date basis, all 33 IPOs that priced in the fourth quarter of 2012 increased their price by an average of 11 percent on their first day of trading, and averaged a return of 12 percent after one week. In addition, on a quarter to date basis, all 33 IPOs are on average 21 percent above their issue price, again outperforming the S&P500, which showed a quarterly decline of approximately one percent.