07.20.2017
By John D'Antona

NYSE Reports IPO Strength

They are busy at the exchange founded under a Buttonwood tree.

The New York Stock Exchange (NYSE) hosted the majority of initial public offerings (IPOs) conducted in the first half of 2017 with 49 new listings, raising over $19.3 billion in capital, representing 88 percent of all proceeds raised in the U.S. (based on operating companies and REITs that are qualified to list on the NYSE).

John Tuttle

According to the NYSE, in the first six months of 2017, the market for IPOs rebounded from 2016, which was impacted by global equity market volatility. The NYSE listed the largest IPOs this year to date, including Snap Inc. (NYSE: SNAP), Altice USA (NYSE: ATUS) and Invitation Homes Inc. (NYSE: INVH), which raised a total of $6.9 billion in proceeds. In addition, global brands such as Canada Goose Holdings Inc. (NYSE: GOOS), Cloudera (NYSE: CLDR), Brazilian airline, Azul S.A. (NYSE: AZUL) and China’s leading K-12 schools operator Bright Scholar Education Holdings Ltd. (NYSE: BEDU), exemplify NYSE’s strategy to help innovative companies access public markets to build on their vision and unlock value.

“Market conditions this year have been solid for raising capital in the U.S., enabling companies to invest, innovate, hire and grow – ultimately fueling the economy,” said John Tuttle, Global Head of Listings, NYSE. “We are thrilled that these companies chose the NYSE for their IPO listings, which is a testament to the strength of our market model and the value we provide to our global community of great companies.”

A trader in New York added that while the figures bode well for the NYSE, he’d still like to see even more IPO activity in the second half of the year. The rationale? More opportunities to trade.

“The market still feels very toppy and pricey at these current valuations,” he began. “There is a lot of cash on the sidelines waiting to either buy something fresh or on any market dips. The problem is, there haven’t been that many market dips.”

Also, the prolonged lack of volatility in the markets also  has kept valuations at or near their highs, another trader added.

“A couple of IPOs could help generate fresh supply in the secondary and give us an opportunity to tap into clients that can’t enter the market at these price levels,” he said. “Institutional investors are choosy for sure but retail guys are really having trouble entering the market now.”

When it came to technology firms, NYSE raised 92% of all tech proceeds. New companies to join the community include Blue Apron (NYSE: APRN), MuleSoft, Inc. (NYSE: MULE), Yext, Inc. (NYSE: YEXT) and others.

From a global perspective, the Big Apple-based bourse enjoyed a strong new in new listings; it brought Bright Scholar Education Holdings Limited (NYSE: BEDU), China Rapid Finance Ltd. (NYSE: XRF), Zymeworks, Inc. (NYSE: ZYME), Netshoes Ltd. (NYSE: NETS), Ardagh Group S.A. (NYSE: ARD)

NYSE also managed to complete the largest biotech IPO for the third consecutive year with the listing of Biohaven Pharmaceutical (NYSE: BHVN).

Touting its innovation in the IPO space, NYSE raised capital in the form of three SPACs, including TPG Pace Energy Holdings Corp. (NYSE: TPGE.U), and the industry’s first Reg A+ IPO, Myomo Inc. (NYSE MKT: MYO), on a national securities exchange.

Thomas Farley

A SPAC is a special purpose acquisition company – which is formed for the purpose of raising capital through an IPO and using those funds to acquire an operating business. Depending on their size and structure, a SPAC may choose to list on either the NYSE or NYSE American.

Looking ahead, NYSE Group President, Tom Farley, said there are still IPOs in the pipeline for the rest of the year and the exchange is ready.

“Our society thrives on the growth that entrepreneurs and their companies deliver. Based on our strong pipeline, we expect a range of IPOs across industries, including tech, biotech and industrials in the second half of the year,” Farley said. “We are preparing for them to join our listed community, and to help them continue to realize their visions as they bring their innovations to the world.”

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