2000 IPO Market Ends Wild Ride on Down Note

2000 IPO Market Ends Wild Ride on Down Note

The IPO market was a roller coaster ride in 2000. The size and vitality of the IPO market fluctuated widely throughout the year, mirroring the volatility in market conditions in general and for technology stocks in particular. Due to a variety of factors, the IPO market enters 2001 with more uncertainty than we've seen in years.

Highlights of the 2000 IPO market include:
  • The overall IPO market consisted of 446 IPOs raising $108.15 billion, compared to 537 IPOs raising $95.33 billion in 1999.
  • There were 339 IPOs by U.S. companies, a 29% decline from the 480 IPOs in 1999.
  • Boosted by the AT&T Wireless IPO raising $10.62 billion in April, gross proceeds for IPOs by U.S. issuers declined only 10% from $61.63 billion in 1999 to $55.46 billion in 2000, and average deal size increased from $128.4 million to $163.6 million.
  • The overall IPO market benefited from a record 107 IPOs by foreign companies raising $52.68 billion.
  • Technology IPOs hovered around 70% of all IPOs for the first three quarters but fell to 48% of IPOs in the fourth quarter. Internet-related IPOs followed a similar trend, declining from 61% of IPOs in the first quarter to 34% in the fourth quarter.
  • Proceeds from tech IPOs fell even more sharply, declining from 68% of IPO proceeds in the second quarter to 37% in the third quarter and to 15% in the fourth quarter.
  • Average first-day gains declined from nearly 100% in the first quarter to a scant 14% for fourth-quarter IPOs.
  • The average 2000 IPO was trading 19% below its offering price at the end of the year, with 173 IPOs trading at least 50% below their offering price at year-end and 38 down more than 90%.
We have just published a review of the 2000 IPO market which includes discussions of:
trends throughout the year;
  • monthly and quarterly data on IPOs;
  • aftermarket winners and losers;
  • regional differences in IPOs;
  • the leading managing underwriters and law firms handling IPOs;
  • valuation shifts between selected traditional companies and their online counterparts; and
    the outlook for 2001.

Click here to read the article. If you have any questions about this article, feel free to contact its authors David Westenberg (617-526-6626, david.westenberg@haledorr.com), or Timothy Gallagher (617-526-5605, timothy.gallagher@haledorr.com).

© 2001 Hale and Dorr LLP. All rights reserved.
This alert is provided with the understanding that it does not constitute the rendering of legal, tax or other professional advice or services by Hale and Dorr LLP or its attorneys.