“At times, I think it’s been dormant or hidden,” he said. “September has been a great month.”
But overall the IPO market in the U.S. is on track to have the lowest number of companies going public since 2009, according to PwC research.
Klausner gave an overview of the market during a PwC event last Wednesday at Capital Factory in downtown Austin on IPO Readiness: Going Public and Being Public.
“The equity market has been pretty volatile in the last few years and 2016 has been no exception,” Klausner said. The themes behind that volatility are well-worn like the Federal Reserve and whether it’s going to raise interest rates, geo-political unrest around the world, Brexit or the United Kingdom voting to leave the European Union and the Chinese Yuan devaluation, he said.
The S&P is up 6 percent this year, but it doesn’t feel like it because of all the volatility, Klausner said.
“On the flip side for companies it’s a good time to go public because the markets are giving companies high valuations,” Klausner said.
To gauge whether or not it’s a good time to go public, PwC looks at the Chicago Board Options Exchange Volatility Index, known as the VIX, to judge the market’s anxiety level. When the VIX is under 20 it’s a good time to go public, Klausner said. It’s currently at 12, he said.
So far, 83 companies have gone public this year and they have raised $13.6 billion, according to PwC research. Last year, 196 companies went public and raised $33.2 billion. And in 2014, 304 companies went public raising $87.1 billion.
September is a very busy month but everything slows down going into November around the election, Klausner said.
“Yes the IPO market is healthy with some caveats we’re not going to have the same number of IPOs as last year,” he said.
In 2016, U.S. IPOs are being led by the healthcare sector with 33 deals that makes up 40 percent of the deals, followed by technology with 15 deals or 18 percent, Klausner said.
The technology market is now looking for profitable growth and not growth for growth’s sake, Klausner said.
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