Flotations pulled as US boom shows signs it is past its peak
MORE US stock market flotations were cancelled in July than at any point in the past 18 months, figures from Dealogic showed yesterday.
Initial public offerings (IPOs) boomed in the first half of the year as strong market conditions at last overcame investors’ crisis-era fears, unleashing enormous pent up supply of share sales.
But the frothy market appears to have peaked, leading some of the more optimistic sellers to pull the IPOs after testing the waters with investors.
Seven flotations were scrapped in July, more than at any time since November 2012, when market conditions were more downbeat.
They had hoped to raise a total of $525m (£312m).
The poor month takes the total of scrapped IPOs to 29 for the year to date – accounting for 9.5 per cent of the 304 listings so far in 2014.
Those cancelled flotations had planned to raise a total of $3.9bn.
At this point last year, only 23 had been cancelled, amounting to 12.2 per cent of the 188 IPOs by early August in 2013.
The most recent flotation to be scrapped was Aina Le’a, a Hawaiian real estate firm which pulled its sale on 5 August.
It gave up as its audit process was taking too long – the business had initially filed for the listing in July 2012.
By sector, healthcare has had the most flops – it has pulled eight floats which had hoped to bring in almost $1bn.
Finance came in next with four cancellations, worth a total of $400m, followed by three technology IPOs worth $225m.