The IPO market didn't roar back to life in 2012 as many thought it would, but the year of the Facebook deal wasn't all that bad either. After starting off at a feverish clip, and peaking in mid-May with the widely anticipated Facebook initial public offering, the market for new companies selling stock to the public ended with a whimper. The poor reception of Facebook's IPO stalled the market, but couldn't undo what was a healthy, while not outstanding, year for IPOs.
The numbers tell the story of a year for IPOs that may not be one for the record books, but also show a steady improvement, including in terms of the:
Proceeds from IPOs. Helped in large part by the $16 billion raised by Facebook, U.S. companies generated $43 billion during the year, Renaissance Capital says. That was up 19% from 2011 and the biggest year since the $49 billion raised in 2007.
Number of deals getting done. All told, 128 companies managed to sell shares to the public, up 2.4% from 2011. While that's more than quadruple the number of deals in the trough year of 2008, 2012 still couldn't keep up with the 154 IPOs in 2010. It was a year of smaller deals, as the median proceeds raised by IPOs fell 23% from 2011 .
Big first-day gains return. Initial investors are again demanding to get compensated for taking on the risk of IPOs. The average first-day pop of IPOs in 2012 was 14%, the biggest in a decade, Renaissance says. Investors drove a hard bargain; 40% of IPOs were priced below their initial price ranges. That's close to the record of 42% IPOs that priced below their ranges in 2010.
But the fact that the IPO market is still falling short of the long-term average of about 200 deals a year shows that while there's a recovery underway, the market is still relatively slow.
And there's no better way to show the lingering pain felt by IPO investors than in the performance of Facebook. The No. 1 social-networking company was the year's biggest IPO and third-largest U.S. IPO ever. But the shares are trading about 29% below their $38-a-share IPO price.
Other than Facebook, there weren't many marquee names among the biggest deals. And there were some notable losers, too. Technology firms Envivio and CafePress, and materials firm Ceres dropped 81%, 72% and 70%, respectively.
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