IPO Withdrawals Are at Highest Level Since 2008
As volatile markets and economic uncertainty keep investors on edge, companies are folding their plans to go public in record numbers.
According to data from Renaissance Capital, 54 companies pulled their initial public offerings so far this year. That’s the highest number since 2008, when 103 firms withdrew their offerings.
The latest withdrawal announcement came Tuesday from Liberty Mutual Agency, the tenth largest U.S. underwriter of property and casualty insurance.
The Boston, Mass., company had initially filed terms for its $1.2 billion IPO in 2010, but postponed the offering that year as investors balked at the price and terms. They postponed their latest attempt amid weak demand.
Glacier Water Services, an operator of filtered drinking water vending machines in the U.S. and Canada, announced the withdrawal of its $86 million IPO Tuesday citing unfavorable market conditions.
Overall, IPO momentum in the United States is slowing, according to the latest report from Ernst & Young.
The average deal size dropped 58 percent and the amount of capital raised plunged 75 percent in the third quarter compared to the second quarter, according to the report.
The IPO drought is also taking a toll on underwriters: Their revenue from fees was down to $228 million in third quarter compared to $805 million in second quarter, according to Dealogic. That’s the lowest level since the first quarter of 2010.
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