Holmes Report 06 Jan 2013 // 12:00AM GMT
This year may finally be the turnaround year for the US IPO market, according to a new survey of transaction attorneys conducted by KCSA Strategic Communications.
In its 3rd Annual IPO Survey, KCSA conducted in-depth interviews with nearly 50 securities attorneys whose firms advised on 87 percent of the initial public offerings listed on major US exchanges during 2012 and found that for the first time more than one third of respondents (35 percent) believe the IPO market in the coming year will be stronger than the previous one.
The remaining respondents think the IPO market in 2013 will be relatively flat when compared with 2012.
The perceived drivers for improvement include stabilization of the US economy and moving beyond the fear of a “fiscal cliff” (59 percent), resolution of the Eurozone crisis (12 percent) and increasing consumer confidence (5 percent).
According to Jeff Corbin, chief executive officer of KCSA Strategic Communications, “Since the end of the financial crisis that started in late 2007, there have been strong hands on the reins of the US capital markets, slowing down the IPO market.
“While there have been some big names that have gone public during the last few years—Facebook, Zynga and others in the social media space—the vast majority of those companies that could have, and should have, accessed the public markets, have had to wait for improving market conditions. Those conditions seem to be coalescing in 2013, which should make for a more active IPO market."
According to 66 percent of those surveyed, the social media bubble has burst. The attorneys almost unanimously agreed that Facebook was both the most anticipated and most over-hyped IPO of 2012. According to 89 percent, Facebook’s IPO will cause valuations of social media companies to be lower.