Report: U.S. IPOs hit 7-year low during 2016 1st quarter

The U.S. market for initial public offerings hit its lowest mark during the 1st quarter since the financial crisis hit in 2008 and 2009 and every flotation was for a healthcare company, according to a report from Renaissance Capital.

Eight IPOs raised a collective $700 million during the quarter, but were only viable due to substantial buys from existing shareholders, according to the report.

Average insider support reached more than 22% in 2015 and soared to more than 40% during Q1 2016. Of the 8 deals, the sole medical device company – Senseonics – is still in the development phase. A pair of biotechs that floated during the quarter are not yet in clinical trials and 3 others are still in Phase I, according to the report.

Another 8 companies postponed their offerings during the quarter, following 9 tabled IPOs during the same period in 2015. The aggregate proposed raise of $1.4 billion would have doubled the actual raise during the just-concluded period, according to the report.

“We believe most of these companies could have completed IPOs had they been willing to take significant discounts (as much as 50% in some cases) to their proposed valuations,” Renaissance Capital wrote.

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