Big IPOs eyeing a brittle Wall Street in 2019

03 January 2019 | Sakenuus
Ali Bekhtaoui and John Biers - Investors have been priming themselves for a potentially huge influx of companies selling stock to the public for the first time, led by ridesharing game changers Uber and Lyft, but the outlook is more uncertain with the vicious return of volatility to the market.

For companies trying to raise capital, volatility is the enemy.

"We enter 2019 on uncertain footing," said Renaissance Capital, a research firm focused on initial public offerings (IPO).

The market is coming off an outstanding 2018 for stock offers, with 231 companies going public and raising US$61 billion, the best year since 2014 when Alibaba entered Wall Street, according to Dealogic.

But financial markets have been on a roller-coaster of late, generating questions about whether conditions are right for more IPOs.

Angst over higher Federal Reserve interest rates and projections for slower global growth have been the key factors behind the swoon in December by a market already unnerved by escalating trade tensions.

Volatility

IPO activity through the first 10 months of 2018 topped 2017 levels by 42%, but tumbled 66% in the final two months of the year as stock markets gyrated.

Several offerings that planned for the end of the year were pushed into 2019, according to a person with a major exchange.

Volatility is "definitely a priority in terms of IPO conversations," said this exchange source.

Waiting in the wings and expected to launch in 2019 are several prominent "unicorns" - a private company worth more than US$1 billion.

This group includes ridesharing service Lyft, which filed confidential papers to go public, and its archrival Uber, according to US business press.

Others that are expected to go public include the lodging service Airbnb, messaging service Slack, content website Pinterest and data analytics company Palantir.

Market specialists are confident these firms should be better equipped to navigate the more challenging environment given their size.

Planning

"Volatility is one of the key factors when companies plan for their IPOs," said Jeff Thomas, who supervises introductions of IPOs at Nasdaq.

Companies have even been known to accelerate a plan to go public if they anticipate even greater volatility down the road.

Still, the market turmoil could affect how much money companies raise.

"If current market conditions presage a US economic slowdown in 2019, investors may want to haircut valuations to incorporate slower earnings growth," said Nicholas Colas, co-founder of DataTrek Research, who noted that Uber, Lyft and Airbnb are all dependent on consumer spending, while Slack and Palantir rely on corporate spending.

"None have been tested by a US recession in their current forms," Colas said.

"Bankers and lawyers are definitely aware" of the spike in volatility, said Douglas Ellenoff, a securities attorney. But stock market jitters won't derail offerings as long as it is "moderate". – Nampa/AFP

Soortgelyk

 

Geingob vergader met Nanso oor studiegeld

1 uur gelede | Onderwys

Me. Ester Simon, president van die Namibiese Nasionale Studenteorganisasie (Nanso), het pas bevestig die organisasie vergader vandag by Staatshuis met pres. Hage Geingob...

Mexikaanse sakeman wil Erindi koop

3 ure gelede | Omgewing

Die internasionale entrepreneur, filantroop en president van die konsortium BAL-groep, mnr. Alberto Baillères, 'n gerespekteerde Mexikaanse sakeleier, is besig om die kooptransaksie met Erindi...

Katrina hoor Maandag 8 Julie

4 ure gelede | Howe

Denver Kisting – Regter Christie Liebenberg het vandag gesê hy sal nie later nie as 8 Julie uitspraak lewer in die verhoor van me. Katrina...

Theo Diergaardt voor vir beweerde bedrog

5 ure gelede | Misdaad

Denver Kisting – Die beheeraanklaer van die landdroshof in Windhoek, mnr. Hans Thourob, het bevestig mnr. Theo Diergaardt, oudminister van grondhervorming, is gister inhegtenis geneem.Volgens...

Windhoek se waterverbruik in die rooi

5 ure gelede | Omgewing

Die Windhoekse munisipaliteit sê oor die afgelope week het Windhoekers 7% meer water gebruik as wat huidige teikens vir waterbesparing toelaat. Die weeklikse teiken is...

Dit moes lankal gebeur het, sê Kanime.

7 ure gelede | Plaaslik

Denver Kisting – Oomblikke nadat hy gisteraand heraangestel is, het mnr. Abraham Kanime aan Republikein gesê dit moes lankal gebeur het.Die Windhoekse stadsraad het gisteraand...

Raad sit oor polisiehoof

16 ure gelede | Regering

Denver Kisting – Die Windhoekse stadsraad (CoW) sou gisteraand vir mnr. Abraham Kanime as hoof van die stadspolisie heraangestel het.Kanime is in Maart verlede jaar...

Windhoek droogste in 90 jaar

16 ure gelede | Weer

Ronelle Rademeyer - Die 2018-’19-reënseisoen sal vir die oorgrote deel van die land in die geskiedenisboeke opgeteken staan as van die droogste in menseheugenis.Die statistiek...

Katrina se lot gou bepaal

16 ure gelede | Howe

Denver Kisting – Onder gewone omstandighede is die staat se verantwoordelikheid om skuld bo redelike twyfel te bewys.In die geval van die oudgoewerneur van die...