Jun 19, 2019

Despite big headlines, IPO activity has slowed in 2019

Stock information is displayed on a monitor at Nasdaq's office in Times Square. Photo: Drew Angerer/Getty Images

Multibillion-dollar stock market debuts from companies like Zoom, Uber and Pinterest have grabbed headlines in 2019 with eye-popping numbers, but new data shows IPO activity actually declined significantly this year, globally and in the U.S.

What's happening: Capital raised for both domestic and cross-border IPOs fell by 37% year-over-year, with volume down 34%, multinational law firm Baker McKenzie reports.

  • The decline from 2018's first 6 months was sharper than expected, with a total of $69.8 billion raised through June across 514 deals, the lowest for both measures since 2016.
  • Cross-border IPO activity fell particularly hard, with a 16% drop in volume and a 55% drop in value compared to 2018.
  • One asterisk to the numbers: the prolonged government shutdown that froze IPO filings for much of January.

Why it matters: A global slowdown in mergers and acquisitions, manufacturing and now capital generation and IPOs shows that 2019 has been an especially tough year for business.

  • The drop in cross-border IPOs may reflect yet another way commerce is being slowed by growing nationalism and fading globalization.

On the other hand: While 2019 has hardly been the best of times, Tom Rice, partner at Baker McKenzie, expects the second half of the year to show "some rays of light."

  • Rice says the U.S. stock market selloff in December coupled with the government shutdown — the longest on record, shuttering the SEC for more than a month — played a major role in the decline of both the number of IPOs and the amount of cash raised by businesses.

What's next? With those disruptions now in the rear-view mirror, Rice is confident the IPO market has strong momentum heading into the second half of the year, especially with the S&P 500 again nearing all-time highs and recent IPOs from companies like Fiverr, Beyond Meat and Chewy riding waves of bullish investor sentiment.

  • "Tensions with China may result in some slowing and more cautious activity in terms of capital formation by Chinese-operated companies looking to list in places like the U.S., but that’s only one piece of the action."

Watch this space: The one part of the world for which Rice does not have high hopes this year is Europe, where business remains paralyzed because of Brexit and the deteriorating economic environment.

Go deeper

Top Trump ally sounds 2020 election alarm over coronavirus response

Photo: Jim Watson/AFP via Getty Images

There is growing concern among top conservative leaders that the Trump administration isn't addressing the long-term economic impact of the coronavirus, several sources tell Axios. One top adviser said if the recovery is bungled it could cost President Trump the election.

What we're hearing: "The next 4-8 weeks is really going to decide whether Trump gets reelected," Stephen Moore, Trump's former nominee for the Federal Reserve board, told Axios. If the administration mishandles its economic recovery efforts, he said, Trump is "in big trouble."

Coronavirus dashboard

Illustration: Aïda Amer/Axios

  1. Global: Total confirmed cases as of 10 p.m. ET: 1,600,427 — Total deaths: 95,506 — Total recoveries: 354,006Map.
  2. U.S.: Total confirmed cases as of 10 p.m. ET: 465,329 — Total deaths: 16,513 — Total recoveries: 25,410Map.
  3. Public health latest: U.S. has expelled thousands of migrants under a CDC public health orderDr. Anthony Fauci said social distancing could reduce the U.S. death toll to 60,000.
  4. Business latest: The Fed will lend up to $2.3 trillion for businesses, state and city governments — After another 6.6 million jobless claims, here's how to understand the scale of American job decimation.
  5. 2020 latest: Top conservative leaders are concerned the Trump administration isn't addressing the virus' long-term economic impact.
  6. States latest: FEMA has asked governors to decide if they want testing sites to be under state or federal control.
  7. World latest: Lockdowns have led to a decline in murders in some of the world's most violent countries — Boris Johnson is moved out of the ICU but remains in hospital with coronavirus.
  8. In Congress: Senate in stalemate over additional funding for small business relief program.
  9. 1 SNL thing: "Saturday Night Live" will return this weekend in a remotely produced episode.
  10. What should I do? Hydroxychloroquine questions answeredPets, moving and personal healthAnswers about the virus from Axios expertsWhat to know about social distancingQ&A: Minimizing your coronavirus risk.
  11. Other resources: CDC on how to avoid the virus, what to do if you get it.

Subscribe to Mike Allen's Axios AM to follow our coronavirus coverage each morning from your inbox.

Federal court temporarily blocks coronavirus order against some abortions

Gov. Greg Abbott. Photo: Tom Fox-Pool/Getty Images

A federal judge ruled Thursday that clinics in Texas can immediately offer medication abortions — a pregnancy termination method administered by pill — and can also provide the procedure to patients nearing the state's time limits for abortions.

Driving the news: The decision comes after federal appeals court ruled 2-1 on Tuesday in favor of an executive order by Republican Gov. Greg Abbott that prohibits abortions during the coronavirus outbreak.

Go deeperArrowUpdated 9 hours ago - Politics & Policy