The IPO World Gets Smaller — Big Number
At the start of each week, MoneyBeat publishes a short column in the WSJ print edition highlighting a statistic getting traction in the markets. This week’s “big number“ is 93%, the percentage of all U.S.-listed IPOs for which companies with under $1 billion in revenue have accounted.
Small has dominated big in the U.S. market for initial public offerings.
So far this year, 159 companies have listed on U.S. exchanges, raising $34 billion. Of those IPOs, 147, or 93%, have been by companies with less than $1 billion in annual revenue, according to Dealogic. These so called emerging-growth companies have accounted for 71% of the amount raised this year through U.S.-listed IPOs.
Both are the highest percentages since the Jumpstart Our Business Startups Act was signed into law more than three years ago, according to Dealogic. The JOBS Act aimed to make it easier for firms with less than $1 billion in annual revenue to tap the public markets by reducing costs and regulatory burdens.
Last year, emerging-growth companies accounted for 84% of U.S.-listed IPOs and 44% of the amount raised, according to Dealogic. In 2012, the year the JOBS Act was signed into law, those companies represented 50% of firms going public on U.S. exchanges and 23% of the money raised.
share of The increased the U.S. IPO market claimed by emerging growth companies comes as the number firms listing on U.S. exchanges has tumbled. The number of U.S.-listed IPOs this year is down 38% from same period last year, while the money raised is off 60%.