If the IPO market is a leading indicator of an improving economy, things are looking up. For 3 consecutive quarters, private equity and venture capital firms have brought companies into the public markets and raised over $10 billion. This kind of business development indicates a positive attitude and means companies are now flush with cash which they’ll use for expansion and marketing.
In the second quarter of 2011, IPO events generated cash investments of $11.9 billion for 47 separate companies. While this is down significantly from the high of the $21.1 billion raised in the 2nd quarter in 2007, it’s a huge improvement over activity that took place during the Great Recession. Henri Leveque, Leader of PwC's Capital Markets and Accounting Advisory Practice says, "Despite the recent volatility in the capital markets, we are optimistic that the IPO market will continue its resurgence and remain an important source of liquidity and capital for both domestic and foreign companies."
Out of the deals generated in the most recent quarter, 14 were from non‑U.S. companies and 33 were from U.S. companies. Industries which saw the most money raised include:
- Technology $4.467 billion
- Consumer $1.1911 billion
- Business services $1.788 billion
- Financial services $1.136 billion
- Energy $964.1 million
- Industrial $698 million
- Healthcare $596 million
- Transportation $319 million
PcW analysts note that investors seem particularly interested in technology offerings. Prices on these issues had an average 1 day return of 16%. The largest 1 day gain in the quarter belonged to LinkedIn, which saw a 100% price rise. While these stock prices will fluctuate, the huge cash infusions put these companies on well-funded growth trajectories, the kind that must be accompanied by marketing campaigns.[Source: U.S. IPO Proceeds Surpass $10 Billion. US IPO Watch. PwC. US. 29 Jun. 2011. Web. 12 Jul. 2011]