As We Move Through 2018, IPO Trends May Be Worth Tracking
Initial public offerings (IPO) have declined in recent years, with many high-value companies electing to remain private. As we move through 2018, IPO activity is projected to increase, although the extent of the rebound is a lot less certain.
Photo courtesy of The Roaming Platypus (Unsplash.com)
2017 IPO Market in Review
Overall, the IPO market showed signs of life in 2017. According to Renaissance Capital, there were 160 total deals, which is double the number of IPOs in 2016. Proceeds also grew nearly 50 percent to $36 billion. The Renaissance Capital report does not include blank-check companies in its totals or IPOs that raise less than $10 million.
According to Renaissance Capital, IPO activity levels should have been higher, given the surging stock market and relatively low volatility. Its report cites uncertainties over the massive tax reform bill and the disappointing performance of several highly-touted IPOs as reasons for the lag.
Overall, the biggest drivers of IPO activity were the biotech and technology industries. Companies like AnaptysBio, Argenx, and Roku delivered stellar returns for investors. However, so-called “unicorns” stumbled mightily after their IPOs. While Snap’s much-anticipated IPO raised $3.4 billion, its stock dropped by 50 percent. Blue Apron’s IPO is also being called a dud. Its shares plummeted more than 70 percent in the wake of disappointing financial reports and operational challenges.
Predictions for 2018
To date, there are more than 60 IPOs publicly in the pipeline, which is a decrease from 69 at year-end 2016 and 118 at year-end 2015. However, it could still be an exceptional year, with several highly valued companies poised to make their public debut in 2018. They include Lyft, Spotify, Dropbox, and Pinterest.
According to Renaissance Capital, 2018 could be a “banner year for technology IPOs,” given a “deep bench of tech unicorns that has had years to prepare offerings.” The report further states: “Volatility is low, corporate taxes are on their way down, and public market valuations are as good as they can hope for. Many tech firms will likely need capital, while employees and investors will seek much-needed liquidity.”
Impact of Confidential Filing With SEC
The IPO market has always been difficult to predict, given that the markets can shift so quickly and dramatically. The expanded ability to file confidentially with the Securities and Exchange Commission (SEC) also shields a growing percentage of IPO activity from public view.
Snap and Twitter are two well-known examples of companies that previously relied on the JOBS (Jumpstart Our Business Start-Ups) Act provision. According to the SEC, 1,350 confidential IPO filings have been submitted, as of March 31, 2017. The SEC is hopeful that expanding the opportunity to all companies will encourage more companies to take the IPO plunge.
If you have any questions or if you would like to discuss the matter further, please contact me, Dan Brecher, at 201-806-3364.
Portability of estate and gift tax enables a surviving spouse to inherit any unused portion of their deceased spouse’s federal estate and gift tax exemption. So, if one spouse doesn’t utilize their full exemption, the surviving spouse can effectively double their exemption amount with regard to estate tax liability. For married couples, portability offers a […]
Pet Trusts in New Jersey and New York: A Practical Estate Planning Tool
For many of us, pets are more than companions—they are members of the family. Yet they are often overlooked or inadequately provided for when it comes to estate planning. A pet trust offers a legally enforceable way to ensure that your animal continues to receive proper care if you become incapacitated or pass away. As […]
For many New Jersey business owners, a closely held company represents decades of work, financial investment, and personal sacrifice. Trusts in business succession planning are one of the most effective tools for protecting that value, allowing founders to control how and when the business passes to the next generation while reducing the risk of disputes, […]
Read Before You Sign: IT Contract Pitfalls Every NJ Business Should Know
In today’s digital economy, New Jersey businesses of all sizes rely heavily on technology vendors, software providers, cloud platforms, and managed IT services. Whether your company is purchasing software, migrating data to the cloud, engaging a cybersecurity consultant, or entering into a long-term managed services agreement, a careful IT contract review can have significant operational, […]
Non-disclosure agreements (NDAs) remain a critical tool for protecting sensitive business information. However, New York NDA requirements have evolved, and businesses must ensure these agreements are carefully drafted to remain enforceable. In a competitive market like New York City, NDAs are commonly used to protect proprietary information, client relationships, and strategic plans. At the same […]
How Courts Evaluate Testamentary Capacity and Undue Influence Will contests in New Jersey are difficult to win, given the strong presumption that a properly executed will reflects the testator’s intent. However, challenges based on lack of testamentary capacity and undue influence remain common, particularly where there are concerns about mental capacity or the involvement of […]
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
Let`s get in touch!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!
