Investment Perspectives 2Q July 2019

The initial public offerings (“IPOs”) of a few highly-recognizable businesses pushed the IPO market back into the headlines in 2Q19. Most notable among these were Uber and Lyft, two competing ridesharing businesses that are poster children for today’s “gig economy”. When IPO activity starts getting more media attention, it is often accompanied by suggestions that this must signal the end of an economic expansion as private company CEOs use a hot market to capitalize on the unsuspecting public’s desire for new issues. While it is true that IPOs usually occur during healthy economies, the cycle coincides more with strong markets because the reception of IPOs is anemic when the market is weak. In this piece we examine IPO volumes over the last 10 years and the state of the current new issue market.