January IPOs Felt Cold Blast of U.S. Government Shutdown

(Bloomberg) -- The only thing colder than January’s polar vortex might have been U.S. initial public offerings.

While expectations of a banner IPO year might still be fulfilled, 2019 opened with the worst month since January 2016, thanks largely to the 35-day U.S. government shutdown.

Only 60 IPOs priced globally, raising $2.7 billion, according to data compiled by Bloomberg. That compared with 126 listings raising more than $13 billion last January. For U.S. exchanges, the picture was especially bleak with only six offerings raising a mere $373 million, compared with $6.2 billion a year ago.

Outside the U.S. , IPOs kept some of their momentum. with 54 offerings raising $2.3 billion. Still, that was only a third of the $6.9 billion raised in 113 IPOs on non-U.S. exchanges in January 2018.

With a Feb. 15 deadline for reaching a permanent deal to keep the federal government open, the prospect of a shutdown Part II continues to loom over U.S. markets.

Some of the companies that have gone public have worked around typical U.S. Securities and Exchange Commission approval requirements by setting the price of their shares in advance. That included Rhinebeck Bancorp Inc., which raised $48 million on Jan. 16 and New Fortress Energy LLC’s $280 million IPO on Wednesday. San Diego-based Gossamer Bio Inc., deploying the same approach as a workaround under SEC rules, is set to officially price its shares on Feb. 12, with a goal of raising $230 million.

A renewed shutdown could cast a pall over Uber Technologies Inc.’s planned listing. That IPO could be among the top 10 of all time based on a possible valuation of as much as $120 billion, according to people familiar with the company’s plans. Uber, as well as its smaller ride-hailing competitor Lyft Inc., have been waiting for the SEC’s feedback on their confidential IPO filings before making proposed terms public.

This year’s other tech IPO candidates include Airbnb Inc., which a person familiar with the company has said is targeting an IPO sometime between June and the end of 2020. Slack Technologies Inc. plans to forgo a typical IPO and pursue a direct listing, a person familiar with the matter said last month.

To contact the reporter on this story: Michael Hytha in San Francisco at mhytha@bloomberg.net

To contact the editors responsible for this story: Elizabeth Fournier at efournier5@bloomberg.net, Matthew Monks

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