Going Public Gets Scary

It’s cold out there — and we aren’t talking about the weather. The chill is coming from the market for initial public offerings.

In the last two days, as the Dow Jones Industrial Average has been whipsawed by triple-digit swings, five companies hoping to make their debut on a United States exchange have withdrawn or postponed their initial public offerings. So far in January, there have been 13 offerings put back on the shelf, according to Dealogic.


Choppy markets aren’t the only reason for the pulled offerings: Eyeonics, which was on deck to go public, instead agreed Sunday to be acquired by Bausch & Lomb. For many recent public offering casualties, however, the markets have been the culprit.

The cold front has reached Europe as well. Apax Partners, the buyout firm that owns the Tommy Hilfiger clothing maker, said Thursday that it had indefinitely postponed plans to list the company’s stock on the Euronext because of the volatile markets.

With merger and buyout activity down sharply from last year, initial public offerings are one of the few ways for venture-capital investors and private equity funds to cash in on their investments. For them, the recent parade of cancelled stock offerings is likely to be discouraging news.

BG Medicine, a medical diagnostics company backed by Flagship Ventures, an early-stage venture firm, was among this week’s hopefuls. But it withdrew the offering Wednesday, citing “current market conditions.”

Until the markets regain a measure of stability, this kind of announcement could be a familiar refrain.

In addition to Eyeonics and BG Medicine, the five offerings pulled in the last two days include CDM Resource Partners, Iron Leaf Capital and Iggys House.

Taken together, the 13 offerings pulled or delayed this month in the United States were expected to raise more than $3.2 billion, Dealogic said.

During the same period in January last year, only two public offerings in the United States were withdrawn or postponed — with a total value of just $315 million.