After the most active first quarter since 2000, the 2Q14 trumped it with the highest number of IPOs in any quarter since the heyday of the tech bubble. With 83 IPOs priced, issuance was up 30% sequentially and 36% year-over-year. While biotechs dominated the IPO market in the 1Q14, second quarter activity broadened significantly with increases from tech, energy, financial and consumer. IPOs gained an average of 9% in first-day trading and 11% in the aftermarket, a healthier balance than recent quarters. The sell-off of high-growth, high-multiple stocks in March and April threatened to derail IPO activity as the market was forced to find a clearing price for new issues. Large LBOs like La Quinta, Sabre and ServiceMaster had to be priced appropriately before returning to the public markets. Growth IPOs also faced headwinds but managed to deliver successes in GoPro, GrubHub, Zoe’s Kitchen and Zendesk. Ten Chinese companies went public in the 2Q14, the highest tally since the 4Q10, including a $1.8 billion IPO from JD.com, setting the stage for Alibaba’s expected record-setting IPO. The second quarter saw 117 companies file for IPOs, 19% more than last quarter and 54% more than the 2Q13.
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