Things are in flux for IPOs these days with mergers hitting record highs in terms of money raised and share sales, but there have also been several delays due to market volatility at the same time.
A report from U.S. News on Thursday (May 13) said global companies have raised around $248 billion.
The new record high has come about through a confluence of factors including a robust equity rally along with the stimulus money given out by the U.S. government in recent months.
And the high numbers include IPOs along with special purpose acquisition companies (SPACs). The total number of IPOs this year has also been a record at 1,054 listings. The U.S. led the pack with $130 billion raised, and Chinese and U.K. firms were right behind, with $39.1 billion and $12 billion, respectively.
But at least two planned IPOs have hit snags in the road, Bloomberg reported Thursday (May 13), with the culprit being a volatile market.
U.S. stocks were snapping back on Thursday (April 13), the three-day downturn prompted by inflation concerns was enough to convince some companies not to go forward with some of their IPO plans.
Those included Hear.com, which had been planning to raise as much as $324 million, and Enact Holdings, a subsidiary of Genworth Financial, which was planning to raise $542 million. The turbulence also affected other equity issuances, along with some companies that have recently gone public.
According to the Bloomberg report, the Chicago Board Options Exchange’s (CBOE’s) Volatility Index reached its highest since March to the mid-20s this week.
SPACs have still been going strong in recent times, but regulation has been descending from the Securities and Exchange Commission (SEC). The commission has been considering new guidelines to curb the growth of the SPACs. And the SEC has begun to consider whether these firms qualify for specific legal protections.
May 13, 2021 at 11:09PM