U.S. IPOs Bounce Back: Five Key Measures of 2017's Listings

(From left) Bobby Murphy, co-founder and chief technology officer at Snap Inc., Evan Spiegel, co-founder and chief executive officer of Snap Inc., ring the opening bell at the New York Stock Exchange (NYSE) with Tom Farley, president of the NYSE Group, during the company\'s initial public offering (IPO) in New York, U.S., on Thursday, March 2, 2017. Photographer: Michael Nagle

IPO cheerleaders gave a collective sigh of relief in 2017 -- a comeback year for U.S. listings.

Conditions were ripe for initial public offerings. Broader equity markets continued to rise, with the S&P 500 Index up almost 20 percent since the start of the year as December winds to a close. Meanwhile, the year’s volatility averaged less than the lowest point of all of 2016. Forty-nine percent more companies went public this year than last.

U.S. IPOs Rebound

Number of listings rose 49 percent from lackluster 2016

Source: Bloomberg data on company listings on U.S. exchanges

Bigger Offerings

The average amount raised also increased to $175 million, despite fewer landmark large listings.

Four companies sold more than $1 billion in stock in 2017: Snap Inc., Altice USA Inc., Loma Negra Cia Industrial Argentina SA and Qudian Inc. While that tops the total for the past two years, it’s still well below the 15 companies that raised that amount in 2015, according to data compiled by Bloomberg.

Bigger and Better

Average share offering size for U.S. IPOs rose as more mature companies listed

Source: Bloomberg data on companies listing in the U.S.

Buyer Enthusiasm

Investors showed an appetite for new stocks, with 18 percent of deals pricing above the marketed share price range, compared with 15 percent in 2016. The portion below the intended range was 19 percent, an improvement from 23 percent a year earlier.

Investors Paid Up in 2017

Proportion of U.S. IPOs pricing below the marketed range shrank from 24 percent a year earlier

Source: Bloomberg data on pricings of IPOs bigger than $50 million in the U.S.

Tech’s Back

A third of the stock sold in IPOs came from technology, media and telecommunications companies -- about double the proportion in 2016. The $12.5 billion in shares offered in 2017 equals the amount in those industries in 2015 and 2016 combined.

But 2017 wasn’t a blockbuster success for mega IPOs. The five deals with offering sizes bigger than $1 billion have declined 15 percent on a weighted average basis. As for the smaller listings, they’ve returned an enviable 30 percent.

Prelude to a Deluge?

Tech companies sold as much stock in 2017 U.S. IPOs as the prior two years combined

Asia Rush

Asian companies continued flocking to U.S. exchanges, raising a combined $4.9 billion and accounting for 13 percent of total volume. While that’s down a tick from 15 percent in 2016, it’s a huge increase from 2012, 2013 and 2015, when Asian companies sold less than 3 percent of the stock in the U.S. The year 2014 was an outlier because of Alibaba Group Holdings Inc.’s $25 billion New York listing, the biggest ever IPO.

Of the 18 IPOs bigger than $500 million this year, four were Asian companies. Qudian raised just over $1 billion and Sea Ltd. sold $989 million in stock, with Sogou Inc. at $658 million and Best Inc. at $518 million.

Asia Deals Rising

Asian IPOs represent more than 10 percent of the stock sold in the U.S. in the past two years

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