As Markets Swoon,  IPO Pipeline Swells


The pipeline for initial public offerings surged during a period of credit and housing market turmoil in the third quarter, but the number of completed deals dropped, according to a quarterly analysis of IPOs by Ernst & Young.

In the third quarter, 26 companies went public and raised $4.1 billion, compared with the second quarter, when 59 companies went public and raised $15.7 billion.

Meanwhile, the IPO pipeline grew during the third quarter, with 151 companies registering to raise a total of $30.4 billion. In the second quarter, 97 companies filed to raise $18.2 billion.

The average size of deals in the pipeline also increased to $201.5 million from $187.3 million.

"More companies filed to go public in the third quarter than the second quarter, in spite of market volatility. However, there were fewer actual IPOs than last quarter," said Maria Pinelli, the Americas director of Ernst & Young's strategic growth markets practice. "It's certain that US exchanges will need an exceptional fourth quarter to top last year's numbers."

In 2006, 187 companies went public on U.S. exchanges and raised $34.1 billion. So far this year, 100 companies went public on U.S. exchanges, raising $21.7 billion.

According to the data, the technology sector spawned the most IPO registrations during the third quarter, followed by the pharmaceutical and oil and gas sectors. Companies in the oil and gas sector filed to raise $6.5 billion, while both pharmaceuticals and technology companies filed to raise $3.6 billion each.

In terms of geographic location, more IPO registrants within the U.S. came from California than any other state.