By Rob Starr, Content Manager, Big4.com
Total volume and proceeds raised in the 2012 IPO market increased over 2011, despite the slowdown in activity during the fourth quarter, according to IPO Watch, a quarterly and annual survey of IPOs listed on U.S. stock exchanges by PwC US. Following a strong performance in October, the market pulled back as companies waited for clarity on U.S. fiscal policy, PwC said. For the full year, the IPO market saw 138 companies completing their IPOs as of December 13, 2012, raising total proceeds of $40.7 billion, compared with 134 companies that had completed their IPOs for all of 2011 raising $35.5 billion, according to the survey.
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. All told, there were 33 U.S. IPOs in the fourth quarter of 2012, surpassing the 29 IPOs in the third quarter of 2012, and 28 IPOs in the fourth quarter of 2011. Total proceeds raised in the fourth quarter were $6.3 billion, down 5 percent from $6.6 billion the third quarter of 2012, and down 3 percent from $6.4 billion in proceeds in the corresponding quarter in 2011.
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.