Government Shutdown Disrupts Delicate 2019 IPO Plans

Capital markets produced no new initial public offerings during the holiday week. However, closing out the year, Chinese firms left a mark on the IPO market in 2018. According to Yahoo! Finance, Chinese firms completed 33 of the 190 IPOs on U.S. exchanges, the second highest total since 2009. Those 33 firms also raised just over $9 billion, second in the post-recession era to 2014, where $29 billion was raised on the back of Alibaba’s $25 billion IPO. 

Another headline impacting IPO markets is the government shutdown. According to the Wall Street Journal, the SEC is operating with a barebones staff through the shutdown and is not processing registration statements, which are needed for a company to go public. Typically, a company files a registration statement months in advance of their planned IPO, allowing time for SEC review and for the company to address regulation. Without these statements being processed, many of the IPOs planned for 2019 will be delayed, disrupting the delicate market timing of the debuts.