Noted venture capitalist Marc Andreessen in June declared the death of the initial public offering, stating in an interview with Vox that companies are now delaying, and even foregoing altogether, going public much to his and the average investor with a retirement account's chagrin. (Andreessen Horowitz is an investor in BuzzFeed.)
But recent statistics show that Andreessen's proclamation may have been premature — IPOs are expected to explode this fall, especially at the New York Stock Exchange, keeping in line with projections from earlier in the year that 2014 would set a record for IPOs. The heavily hyped Alibaba debut is expected later this week on the NYSE, marking what will likely be the largest initial public offering of all time with an estimated $155 billion valuation.
That whale aside, regulatory filings show that the NYSE is on track for a record smashing slate of IPOs in September and October, with 40 deals scheduled over the next six weeks. Outside of Alibaba, the exchange has 13 IPOs slated for the next two weeks alone that are on track to raise $8 billion in capital. (As for Alibaba, its debut is expected to be a $24.8 billion deal for the NYSE.)
"All eyes are focused on Alibaba next week, but we have a couple of dozen other IPOs planning to come to market in the weeks following that could raise almost $10 billion," said Scott Cutler, the NYSE's executive vice president and head of global listings. "If you look at the underlying lack of volatility in the market, and fall is typically a busy season, we're on a tear in the U.S. for capital raising. It's going to be a record year in the last decade."
Specifically, the NYSE is preparing to help Citizen's Financial and Colombia's largest banking group, Grupo Aval, go public at an estimated $3.8 billion and $1.3 billion, respectively.
The $10 billion projection is a significant number for the NYSE since last October was a record month for the exchange, with a total of $9 billion in IPO capital raised from 19 deals.
Cutler said the rise of tech giants choosing to IPO, like Twitter last year, King earlier this year, and now Alibaba, have created momentum in the sector. Moreover, the U.S. exchanges have become a more attractive place to list than their emerging market peers due to the stability and the NYSE's ability to execute an IPO smoothly. Alibaba embodies both of these trends, and will be one of the most watched IPOs since perhaps Twitter last November.
"Alibaba will be a very exciting transaction in the market," Cutler said. "Emerging markets — that has been a tough place for equities in the last year, a lot of money has gone back to the U.S. for the stability. Companies are looking for a place for execution, and not finding that in their home markets."