Initial public offerings

The number and value of IPOs each year loosely follow the overall view of the stock market. In general, private companies do not want to go public when the stock market is in decline, as investment funding through stock issuance is likely to yield less value. Conversely, when business sentiment is upward, and the general economic environment is steady, IPOs generally occur as the expected return is higher.

In response to the subprime mortgage crisis, IPO volume plummeted 50.0% in 2008 due to broad stock market declines and swelling investor uncertainty. After falling further in 2009, the volume of IPOs surged in 2010 as the economy returned to growth. After a slight decline in 2011, investor confidence in the stock market increased from 2012 through 2014, pushing up IPO volume and value to an estimated $85.3 billion. Growth during this period was largely driven by technology and health mega-deals, such as the IPOs of Facebook, Alibaba and Twitter. 2014 investor confidence strengthened, coming off a record year for equities in 2013. However, in 2015 the IPO market cooled as investor uncertainty spiked in the wake of an imminent global slowdown, stock market volatility and geopolitical instability. This trend continued into 2016, as IPO proceeds declined 37.3% over the year. Despite those shortcomings, the remainder of the period was poised for growth; IPO volume grew in 2017 and 2018. In 2019, the highly publicized IPOs of Uber and Lyft needed to live up to expectations. While the healthcare and technology sectors continued to dominate IPO activity, overall activity fell slightly. While these mishaps were expected to resonate with IPO activity in the near future, as investors will be expected to be more conservative with their valuations, 2020 experienced a substantial increase in IPO proceeds, due to a marked increase in Special Purpose Acquisition Companies (SPACs). This increase occurred despite the stock market experiencing heightened volatility amid the COVID-19 pandemic. For example, the SPAC IPO count was 34 in 2017. As of 2021 reached 613 and is expected to grow in the coming years. However, market volatility experienced as a direct result of the COVID-19 pandemic caused funding for IPOs to dwindle as investors turned to more stable investment vehicles. What was once considered a short-term problem soon turned into a global economic downturn spilling into 2025. Inflation is making money more expensive to borrow and investors can achieve stable gains through government bonds and higher grossing commodity investments. As inflationary pressure dissipates, companies can again begin to look at launching an IPO.