Stock markets both in the United States and abroad are slated to see significant IPO activity before year’s end. The Financial Times reports that Italy’s Pirelli, Alibaba-backed Best Logistics, and video streaming platform Roku are all slated to list in the coming months.
“As long as overall markets remain relatively constructive and transactions continue to be executed well, we continue to expect healthy volumes over the rest of the year,” said David Ludwig, co-head of Americas Equity Capital Markets at Goldman Sachs.
2017 has performed significantly stronger than 2016, with 112 IPOs priced to date, versus 63 at this time last year.
“It’s happening again,” writes CNBC’s Bob Pisani. “The IPO market is heating up...There's certainly no shortage of prospects: at least 150 tech unicorns (those companies with valuations over $1 billion) are waiting to go public.”
Roku, the streaming player, estimates a target valuation of $1.3 billion. Last week Italy’s Pirelli, one of the largest tire manufactures, estimated a target valuation of €8.7bn, which will make it one of the biggest IPOs of the year.
The Financial Times quotes Martin Thorneycroft, Head of Equity Capital Markets for EMEA at Morgan Stanley, stating, "Across Europe the IPO calendar has really picked up — there are six IPOs currently in marketing already. We’d expect that number to grow reasonably meaningfully over the next couple of weeks.”
While some IPOs have fallen flat this year, this increase in activity and estimated valuations indicates that IPOs will come out strong at the end of 2017 and leading into 2018. One new element in play is the use of Regulation A+ to go public, as seen with Adomani in June, the first Reg A+ IPO on NASDAQ, which was underwritten by Boustead Securities and listed on Boustead affiliate FlashFunders.
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