...Investment bankers are whipping out a deal a week and the institutional investors are gobbling them up and coming back for more. Retail investors are as usual picking up the scraps from their friendly brokers lower in the food chain, but nevertheless the capital is pouring in to IPOs, secondary’s especially, anything with “tech” in the name.
Even more significant is the growing trend toward issuer up-listing. I recognize this trend and feel it will continue through the rest of 2015 and well into 2016. The elements of this trend is a combination of addressing NASDAQ listing requirements and accordingly raising share prices through reverse stock splits, simultaneously raising capital from rights offerings, warrant calls, secondary offerings or PIPEs which is keeping law firms and accounting firms busier then they have been in many years.
Emerging growth companies to a lesser degree are taking advantage of Reg A + and crowdfunding offerings especially in the consumer, entertainment and cannabis sectors of the market. MicroCap markets around the world are surging with popularity, and growth in microcap ETFs is adding to the fun.
As new capital pours into many well known companies some challenges for capital remain for lesser known companies. Aftermarket support from retail investors is the main challenge when institutional investors seek to lighten positions and rotate holdings. Following the opening trading of a new issue, liquidity tends to lessen after the initial excitement, press releases and announcements. Due to softened interest and lower buy side demand, stock prices tend to drift lower often times placing pressure on the bid.
The second half of 2015 looks like it will continue along these lines as up-listing is trending and emerging growth companies need more and more capital to grow. External market threats like Greece or Puerto Rico financial failure merely become blips on the radar screen. Capital growth along with July 4th will be celebrated with fireworks, BBQ’s and at least one blockbuster movie – you can find me watching Terminator.
So here’s to the entrepreneurs and bankers, keep those IPOs and secondary’s coming! Travel safely enjoy the holiday see you in the markets after the 4th!
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