Where are the brightest opportunities—and the most significant risks—in the U.S. IPO market? In the latest edition of our study, Going Public: The U.S. IPO Report, we examine IPOs that priced in 2019 to uncover the critical trends and developments that prospective issuers, sponsors, investment banks and investors need to keep top of mind in the year ahead.
Top Trends to Follow
Based on our analysis, we see several overarching trends shaping the IPO outlook, including:
- While the total number of deals was down in 2019, solid pricing and returns were strong overall.
- Most IPOs in 2019 were by unprofitable issuers and a large number were pre-revenue.
- Despite some large, high-profile IPOs, the broader trend has been away from “mega IPOs” and toward smaller cap IPOs.
- Shareholder enfranchisement is declining, with only about one-third of issuers allowing shareholders to act by written consent and only one-third allowing shareholders to call special meetings.
- The SEC review process continues to be streamlined, with a continued lower average number of comments.
- Where insiders participate in an IPO, they increasingly are acting as anchor investors at the outset of the IPO roadshow.
- Foreign private issuers continue to access the U.S. IPO market, with a particular uptick in China-based issuers.