A $126-million initial public offering by online university operator Grand Canyon Education (LOPE.O) in November spared the U.S. IPO market from being completely idle in the final quarter of 2008 — a year to forget for most IPO participant, according to a Reuters report.
With no more IPOs on the calendar this year, 2008 is set to end with only 29 deals, yielding $26.4 billion, down 43 percent from 2007, when 202 IPOs generated $46.3 billion.
Had it not been for the mega-IPO in March by Visa (V.N), the largest ever in the United States, the year would have been worse. Without the credit-card operator’s $17.9-billion offering — more than two-thirds of the year’s proceeds — it would have been the slowest IPO market since 1990, when 181 IPOs raised $5.4 billion, according to Thomson Reuters.
As it was, it was the slowest since 2003.Frazzled by the economic and financial crises, investors have stayed away in droves in 2008, sending down one IPO stock after the next, and keeping dozens of prospective companies from the public markets.
“This is dramatically different from other slowdowns because it’s been caused by a fundamental shaking and quaking of our financial system,” Mary Ann Deignan, head of equity capital markets for the Americas at UBS Investment Bank, told Reuters.”That has caused everyone to become more conservative — this is a reset of what people believed their wealth to be.”That anxiety took its toll on IPOs.