U.S. IPO Market Expected to Surge in 2014

It looks like another big year for the American IPO market in 2014, according to KCSA Strategic Communications’ fourth annual survey on initial public offerings.

KCSA interviewed some 50 securities attorneys whose firms advised on 40% of the IPOs listed on major U.S. stock exchanges in 2013. 

Forty-nine percent of the respondents believed that the IPO market this year would be stronger than last. 

The remaining respondents thought this year’s market would be as strong as 2013.

Forty-five percent of those surveyed expected the improvement to come on the strength of a stabilizing U.S. economy and capital markets, while 30% thought monetary and fiscal policy would drive improvement, and 25% placed their bets on increasing investor demand.

Last year’s IPO market was the strongest in the last decade in terms of both IPO proceeds and number of deals, KCSA said in a statement. Moreover, according to survey participants, senior executives of the companies that went public were unanimously satisfied with the success of their IPOs.

KCSA noted that company expectations were based on listing price, aftermarket performance, investor demand and total deal value.

“2013 was the IPO market turnaround that the investor community has been waiting for since before the financial crisis began,” KCSA’s CEO, Jeff Corbin, said in the statement.

“The market has seen strength from nearly every sector including buzzworthy social media companies like Twitter, post-LBO blockbusters such as Hilton, a resurgence of small and mid-cap IPOs and a steady drumbeat of private equity and venture-backed listings.”

Corbin said investors were anticipating a robust IPO market in 2014 based on continued high company valuations and stable market conditions.

Social media will continue to be a source of IPO activity in the coming year, according to the survey. The attorney respondents almost unanimously agreed that Twitter was the most anticipated IPO in 2013 — and that it was overhyped.