Cash Raised Through IPOs Reached 7-year Low in 2016

By:
Chris Gaetano
Published Date:
Dec 20, 2016
Cracks

The amount of cash companies raised from initial public offerings shrank to their lowest levels in seven years as more companies opted to either delay or withdraw their plans to go public and seek cash some other way, according to CFO.com. An analysis by Renaissance Capital, an IPO investment adviser and research firm, found that the 105 pricings this year raised $18.8 billion total, a significant fraction lower than the $30 billion raised through 170 IPOs last year. The researchers attributed this to a lack of tech offerings, which typically have generous IPOs, which in turn was attributed to what was seen as a disconnect between what they thought they were worth as a private company and what they would be valued at as a public company. Companies instead have been pursuing alternate means of getting additional funding, such as mergers and acquisitions, or private capital that doesn't have the risks of going public may bring. However, the companies that do eventually go public are having their best year since 2013, according to CFO.com, as the average IPO was up 23 percent from its offering price. 

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