Following the Tech IPO Market

On Wednesday, July 27, 2016, Renaissance Capital reported that 29 of this year’s 30 initial public offerings outside of the biotech sector were trading above their IPO offer price. The financial media has suggested bullishness in the tech IPO market as a result of the high private valuations being received by tech unicorns such as Uber and relatively solid performances by recent tech sector public listings such as Twilio and Line. 

By comparison, only 7 of the 19 biotech IPOs in 2016 are trading above their IPO price, including only 2 of the 12 issuers that have completed their IPO since the second quarter began on April 1. It would appear that the 2014-15 biotech rage has been impacted to a greater extent than techs by macro factors, including healthcare reform and the presidential election, as well as perceived sector underperformance in 2016. 

In The Wall Street Journal on Saturday/Sunday, July 30-31, 2016, Brett Paschke, head of Equity Capital Markets at William Blair & Co., is quoted as saying, “We are seeing many companies making preparations to launch and expect a more active IPO market in the coming months.”

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