Going public today using the traditional IPO method has become extremely difficult. The reason being is the risk/reward scenario for underwriters has been greatly diminished. The number of companies that are using this traditional route has shrunk by over 90%.

It wasn’t until February 2009 before a single company went public on New York or London stock exchanges signaling the slowest IPO market in more than a decade. A pharmaceutical spin-off along with a emerging markets IPO got the ball rolling with a few more companies following but, all in all, the economy has slowed the IPO markets to a snails pace. So far, despite their scarcity, the new public companies have performed fairly well, though none have displayed blockbuster results.

The 2009 IPO Index, which is includes the seven major IPOs on U.S. exchanges this year, is trading slightly behind the S&P 500 this year.

Recently, we have started to see a small uptick in the IPO marketplace.

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Other posts of the serie

  1. Going Public in the Next 12 Months– Part 1 (This post) - November 16, 2009
  2. Going Public in the Next 12 Months – Part 2 - November 17, 2009
  3. Going Public in the Next 12 Months – Part 3 - November 18, 2009
  4. Going Public in the Next 12 Months– Part 4 - November 19, 2009
  5. Going Public in the Next 12 Months – Part 5 - November 20, 2009
  6. Going Public in the Next 12 Months - Part 6 - December 1, 2009
  7. Going Public in the Next 12 Months - Part 7 - December 2, 2009
  8. Going Public in the Next 12 Months - Part 8 - December 3, 2009
  9. Going Public in the Next 12 Months - Part 9 - December 4, 2009
  10. Going Public in the Next 12 Months - Part 10 - December 7, 2009