Filings for European IPOs Surge as the US IPO Market Remains Sluggish

July 13, 2010 – Over the past three months, 59 European companies have filed with European regulators to raise over $14 billion through initial public offerings (IPOs). This is the greatest number of European filings by companies to go public since the second quarter of 2008.

So far this year, 77 companies throughout Europe have raised $13.7 billion by going public in Europe. This exceeds the $12.9 billion raised by 83 companies through US IPOs during the same period.

Most importantly for investors, European IPOs that have started trading this year increased in share price an average of 3.5% compared to a drop of 7.6% for U.S. IPOs. 

While the global markets and the Western economy remaining problematic, 38 U.S. companies have withdrawn or postponed their plans to go public, while only 12 European companies have canceled or withdrawn their going public plans in Europe.

The strength of the European IPO market compared to that of the U.S. has surprised many due to sluggish economic growth in Europe.  A consensus of economists is that the US economy will grow slightly over 3% this year and the 16 countries that use the Euro will only growing slightly more than 1.1%.

It’s surprising and a bit reassuring that the European IPO market has survived the Euro debt crisis and is active.  With Europe’s economy showing some stability, the second half of this year could see the number of European IPOs and the amount of capital raised outpacing the number and capital raised during the first six months of this year.

Author:  Jeffrey Friedland