The market for initial public offerings (IPOs) stagnated after the financial crisis, and a lack of blockbuster deals on the horizon could have it sluggish for some time. That means that if you’ve been hoping for a turnaround in the IPO exchange traded fund (ETF), it could be a bit of a wait.
So far, the IPO schedule includes manufacturers hamstrung by debt and a Chinese solar company, reports Lynn Cowan for The Wall Street Journal. In other words, the market is still waiting for an IPO deal that looks a little more like a sure shot to lure investors. This year has been quiet so far; only eight companies have gone public, although that’s seven better than this time last year.
Executives at would-be IPO companies are playing it safe because of some of the consequences of going public, one of which is jobs. After a company goes public, that’s when 90% of the jobs are added, says Rachel Beck for Associated Press. [Playing the IPOs with ETFs.]
The market for stock offerings collapsed during the financial crisis in late 2008. Young companies – like their larger and more established rivals – faced plunging sales and profits, making them unattractive to investors. Some companies are steering clear of an IPO for now, putting themselves up for sale or trying to get funds from other sources. [What to Do When IPO Activity Picks Up.]
For more stories about IPOs, visit our IPOs category.
- First Trust IPOX-100 (NYSEArca: FPX)
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.