IPO Market in the Best Shape of the Past Ten Years

January 26, 2018
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Investors interested in the latest Initial Public Offerings (IPO) will be pleased to learn that 2018 should be the best year that we’ve seen in a long time. 2014 was the last time that there were so many highly promising IPOs on the market at the beginning of the year.

New IPO Will Add to a Strong January

The IPOs released onto the stock market so far in 2018 have generated around $3.1 Billion in capital. With the addition of an expected 10 IPOs before the end of the month, that number would climb to around $8 Billion. We haven’t seen this much new capital being raised for IPOs in more than ten years, and it’s yet another sign that 2018 is going to be a positive year for the stock market.

Companies offering public shares are diverse in their core businesses, which indicates that it won’t just be tech stocks dominating the market over the coming year. Gates Industrial Corporation PLC is a British company expected to make their IPO in the next few days. The company manufactures transmissions and other power equipment that is used in automotive, mass transportation, agriculture, and construction. Gates shares are likely to be priced at around $19, which could raise $750 million in investment for the company.

PagSeguro Digital Ltd. Is another company that is expected to make its IPO before the end of January. The Brazilian firm focuses on financial technologies which are used by SMEs (Small and Medium Enterprises) for payment services. The company’s initial offering could include up to 92 million shares, which could raise up to $1.75 billion if the market interest is there. Shares will likely be priced around $20 when the offer goes public.

Florida based security company ADT already made their IPO earlier this month. The company raised around $1.6 Billion for shares that were priced at $14 each. This was below projections of $19 per share, but should assist ADT in addressing debt and moving forward with growth strategies.

Plenty of Options for New and Experienced Investors

IPO investing always carries some risk, although the same could be said for any investment. In some ways, IPOs may be more favorable for first time investors, because they can be a good way to enter the stock market and learn things from the ground up, with a brand new stock.

The high number of IPOs in 2018 and the significant capital generated is a sign of a strengthening worldwide economy. It should give investors confidence in the stock market as we move deeper into 2018.

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