Regulation and the U.S. IPO Boomon May 25th, 2011 at 11:05 am
The U.S. is experiencing an IPO boom (WSJ subscription req’d), which seems to undermine the theory that U.S. IPOs were hurt by the Sarbanes-Oxley Act of 2002 and further damaged by the Dodd-Frank Act of 2010. Is the boom a sign of a resurgence in U.S. competitiveness in the international market for IPOs? Notably, LinkedIn’s successful IPO in the U.S. coincided with Glencore’s flat, $10 billion IPO in the UK and Hong Kong, which reportedly was “marred” by short-selling.
The current, tech-heavy boom is drawing comparisons to the tech boom of 1999, but many of that year’s U.S. offerings crashed soon thereafter. Will LinkedIn’s IPO and yesterday’s $1.3 billion IPO of Russian search engine Yandex on NASDAQ become a symbol of U.S. prowess or ineptitude? Yandex’s share price rose 42% in first-day trading while the NASDAQ index declined 9%. What is the relationship between the U.S.’s relative share of the IPO market and the amount of long-term wealth created by newly public companies?
Update: I.P.O. Values Samsonite Stake at Up to $1.5 Billion (Hong Kong offering) (May 31, 2011)
Update: Recent articles questioning European and Chinese IPO markets: Europe Faces a Struggle With Insipid Public Offerings (June 26, 2011) (WSJ subscription req.); Prada Grapples With Hong Kong Slump as IPOs Drop on China (June 26, 2011)