Uncertainty and volatility make for uneasy bedfellows in any investment environment, but the bite is most keenly felt in initial public offerings. This has been the worst start for listings since the financial crisis, with Europe hit particularly hard by the deal drought, according to Bloomberg data. In the US, at least, a horde of big tech companies is gearing up to go public. Kat Van Hoof reports.

Initial public offerings (IPO) activity has been hindered by a government shutdown in the US, disappointing growth figures out of Germany and China and the spectre of geopolitical risks, such as a US-China trade war and Brexit. Data from Bloomberg shows that in Europe, the value of announced Western European IPOs so far in 2019 is at €490m, compared with €8.7bn over the same period in 2018. Not since 2009’s lack of any IPOs at all has Europe seen such a barren IPO landscape.

The gloomy picture was complete when one of 2019’s most anticipated listings, Volkswagen’s truck and bus subsidiary Traton, was postponed due to economic conditions. Though the first quarter is set to end on this dismal note, there is some reprieve on the horizon. Italian payments firm Nexi, owned by a private equity consortium of Bain Capital, Advent and Clessidra, is eyeing an IPO in Milan during April, which could value the business at €8bn.

All eyes are on the US market and the potential for the pendulum to swing in completely the opposite direction. A number of huge tech companies – sometimes referred to as ‘decacorns’, indicating valuations in the tens of billions of dollars – are waiting in the wings to exploit the IPO window. Ride-hailing company Lyft kicked off bookbuild for an implied market capitalisation of up to $23bn earlier this week. Competitor Uber has said it will launch its listing in April. Other IPO candidates looking for a valuation above $10bn are co-working space provider WeWork, home-sharing platform Airbnb, messaging app provider Slack and content-sharing platform Pinterest. If even half of the expected tech unicorns come to market, they could turn 2019 from a dud into a bumper year.

data trends 210319

PLEASE ENTER YOUR DETAILS TO WATCH THIS VIDEO

All fields are mandatory

The Banker is a service from the Financial Times. The Financial Times Ltd takes your privacy seriously.

Choose how you want us to contact you.

Invites and Offers from The Banker

Receive exclusive personalised event invitations, carefully curated offers and promotions from The Banker



For more information about how we use your data, please refer to our privacy and cookie policies.

Terms and conditions

Join our community

The Banker on Twitter