Mergers and acquisitions continue to take public companies private. There is a tremendous amount of investment dollars waiting for a home with predictable returns. The trend seems to be to buy established companies with a track record of steady and predictable earnings. There are some very large funds seeking to take very large public companies private. In 2006 we started to see billion dollar deals seeking to take casinos and REITS private. This trend will continue in 2007.

NYSE and NASDAQ have seen declines in the number of IPO’s for the past three years whereas the London Stock Exchange (LSE) and AIM markets have increased 148% in the last year. Last year the market value of the LSE IPO’s was $50.9 billion compared with only $14 billion for NASDAQ and $26.9 billion for NYSE.

Here are some FACTS:

• Worlds largest IPO, Industrial and Commercial Bank of China, was valued at $22 billion. It chose to be listed on the Hong Kong and Shanghai markets in October of this year.
• Five of the 10 largest IPO’s took place in the last two years, none in New York.
• This year, global investment banking fees totaled $67 billion; only 44% came from US transactions.
• Last year, SEC fines totaled a whopping $1.9 billion, up from $522 million in 2001. London’s SEC equivalent fined firms only $33 million in 2005.
• So far this year there has been 172 IPO’s worth some $40.9 billion that listed on NYSE and NASDAQ. London has already listed 249 IPO’s worth $50.8 billion.

This is a drastic change to the 2004 where 223 IPO’s worth $50.3 billion went public in New York, compared with 224 worth $11.6 billion in London.

It suffices to say that if we do not make some radical changes to attract companies to list in the US markets then we are doomed to be a second class citizen in the global marketplace.

Bookmark to: