2008 IPO Report - Initial Public Offerings

US IPO Market Review and Outlook2007 ReviewUS IPOs – 1996 to 2007With 207 offerings, gross proceedsof $46.5 billion and a median offeringsize of $119.4 million, the 2007 US IPOmarket was the largest since 2000, if onlyby a slim margin. Compared to 2006,results reflected a 5% increase in thenumber of offerings and a 15% jump ingross proceeds, as the median deal sizereached the highest level on record.While the annual deal totals over thelast four years—averaging 200 IPOs peryear—suggest that the IPO market mayhave reached a new plateau at roughly twoand one-half times the level that prevailedbetween 2001 and 2003, the weakeningmarket and economic conditions seenat year-end in 2007 have persisted into2008, clouding this year’s outlook.US issuers86698768619975221996 1997Source: SEC filingsForeign issuers53757353 480433101998 1999446107339200091 75 7114 9 1077 66 612001 2002 2003205 190 198 20734 32 35 58171 158 163 1492004 2005 2006 2007The number of offerings by US-basedissuers declined 9%, from 163 in 2006to 149 in 2007, reflecting the lowest totalsince 2003. Gross proceeds, however,increased 6%, from $29.4 billion in2006 to $31.3 in 2007, due to a declinein smaller offerings and an increase inthe dollar volume attributable to billiondollarofferings. The number of IPOsbelow $50 million fell from 37 to 22, andmedian deal size by US issuers increasedfrom $100.8 million to $105.0 million.Despite concerns that the more stringentregulatory and compliance environmentin the United States might discourageforeign-based issuers from listing on USexchanges, US IPOs by foreign issuersincreased 66%, from 35 in 2006 to 58in 2007—the highest annual total since2000. Gross proceeds increased 40%,from $10.9 billion to $15.3 billion, whilethe median deal size declined from$200.0 million to $190.4 million.Chinese issuers produced a whopping31 IPOs in the US in 2007, with grossproceeds of $6.2 billion, representingmore than half of all deals and proceedsfrom foreign-issuer IPOs. Two high-profileChinese IPOs occurred outside of theUnited States, signaling the emergingstrength of Chinese stock exchanges—China Railway Construction raised $5.4billion on the Shanghai Stock Exchange,US IPO Dollar Volume – 1996 to 200748.810.038.81996US issuers Foreign issuers $ billions28.9Source: SEC filings59.78.730.8 32.1199740.81998and Alibaba.com pocketed $1.49billion on the Hong Kong StockExchange. Far behind China werethe next-highest generators of foreignissuerUS IPOs, Bermuda and Israel,with six each, and Greece with four.Foreign Country Rankings – 2000 to 2007China 72Israel 34Bermuda 31Canada 24Greece 1595.333.761.61999108.252.755.5200041.39.132.2200125.46.419.0200215.26.19.1200346.539.0 31.440.415.38.7 5.2 10.930.326.229.4 31.32004200520062007The energy-related industry sectorled the IPO market for the thirdconsecutive year, with 35 IPOs, or 16%of the total—up from 30 IPOs (15%of the total) in 2006. Other leading sectorswere biotechnology/pharmaceuticalswith 25 IPOs (12%), healthcare/medicaldevices with 21 IPOs (10%), andsoftware with 20 IPOs (also 10%).The number of IPOs by technology-relatedcompanies increased 27%, from 84 in 2006(42% of the total) to 107 in 2007 (52%of the total). Gross proceeds raised fromtech-related IPOs soared by nearly 50%,