Why APO’s are replacing IPO’s

There are several reasons why APO’s are becoming the defacto IPO marketplace.  Firm commitment underwritings (IPO funding guaranteed by the underwriter) have gone the way of the dinosaur.  All of the tier one underwriters such as Merrill Lynch, Citigroup, JP Morgan, etc., were either acquired or decided to become “banks” last year so they could survive the financial downturn in the economy.  These were the guys that did the big IPO’s – deals that raised anywhere from $200MM to billions of dollars.  The four horsemen of the apocalypse (Montgomery Securities, Robertson Stephens, Hambrecht & Quist and Alex Brown) who were responsible for most of the smaller IPO’s (below $50MM) have also disappeared.  This translates into “no more underwriters, no more IPO’s.”

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Other posts of the serie

  1. Alternative Public Offering – Part 1 - May 5, 2009
  2. Alternative Public Offering – Part 2 - May 6, 2009
  3. Alternative Public Offering – Part 3 - May 7, 2009
  4. Alternative Public Offering – Part 4 - May 8, 2009
  5. Alternative Public Offering – Part 5 - May 12, 2009
  6. Alternative Public Offering – Part 6 - May 13, 2009
  7. Alternative Public Offering – Part 7 - May 14, 2009
  8. Alternative Public Offering – Part 8 - May 15, 2009
  9. Alternative Public Offering – Part 9 - May 16, 2009
  10. Alternative Public Offering – Part 10 - May 18, 2009
  11. Alternative Public Offering – Part 11 - May 19, 2009
  12. Alternative Public Offering – Part 12 - May 20, 2009
  13. Alternative Public Offering – Part 13 - May 21, 2009
  14. Alternative Public Offering – Part 14 - May 22, 2009
  15. Alternative Public Offering – Part 15 - May 25, 2009
  16. Alternative Public Offering – Part 16 - May 26, 2009
  17. Alternative Public Offering – Part 17 - May 27, 2009
  18. Alternative Public Offering – Part 18 - May 28, 2009
  19. Alternative Public Offering – Part 19 (This post) - May 29, 2009
  20. Alternative Public Offering – Part 20 - May 30, 2009