Wednesday 20 November 2019

Facebook debacle stunts IPOs

Donal O'Donovan

Donal O'Donovan

Fast growing Irish companies like glass maker Ardagh Group and China-focused PCH Solutions are not the only ones to delay mooted stock market listings this year.

Initial public offerings (IPOs) have slumped globally to the lowest level since 2008 on economic fears and after the disastrous Facebook stock market debut earlier this year, according to the research

The $112bn (€85bn) companies raised through IPOs this year is the lowest total since 2008, according to the data compiled by Bloomberg.

Western Europe was worst hit, with activity dropping to one-third of the 2011 level.

Concern about China's economy helped cut activity proceeds in Asia by almost half.

The US fared better but a hoped-for recovery also petered out there after reaction to Facebook's IPO spurred drought in US deals.

The Facebook IPO raised $16bn but shares fell by one-third within three weeks, leaving investors nursing big losses.

The lack of action helps explain why Irish names, including Liam Casey's PCH Solutions and Paul Coulson's Ardagh Group, held back from their planned stock-market debuts this year.

Cork-based PCH had been tipped for a partial float on the Hong Kong Stock Exchange to raise as much as €200m for well over a year, but dampened down speculation of a listing in October.

An Ardagh flotation has also been long expected and much delayed even though a deal could raise as much a €2bn for the glass-and-packaging group.

It is now expected to go ahead with a listing in New York within months, in what will be the next big public stock sale by an emerging Irish PLC.

The same trend has been seen outside Ireland and means a huge backlog of supply is building up around the world.

If investor appetite improves that could lead to a boom in activity in 2013.

Irish Independent

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