U.S. IPO boom braves market volatility

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Weeks of stock market volatility have done little to dent the record-setting pace of U.S. initial public offerings, with capital market insiders forecasting a strong finish to the year and a robust pipeline of listings in 2022.

More than 2,000 IPOs raised a combined $421 billion globally by the end of September, a record high, as private companies rushed to attain the soaring valuations of their publicly listed peers. That was more than double the proceeds raised during the same period last year, according to Refinitiv data.

Still, U.S. IPOs proved more resilient than those in Europe, where seven listings were pulled. With U.S. lawmakers agreeing last week to postpone the debt ceiling issue for two months and investors coming to grips with the Chinese property market's jitters, IPO bankers and lawyers said most companies were keeping their listing plans on track.

IPO hopefuls that braved the market volatility were rewarded by investors, albeit less than they previously expected. Shares of U.S. companies that went public in the last four weeks have gone up 25.5% on average, compared with a 42% rise in value for those that went public this time about four months ago, according to Dealogic., said the recent IPO jitters showed that the market was resilient, but that investors were becoming more selective.

 

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