A Hot IPO Market

As we mentioned in the textbook, the timing of IPOs appear to follow a "hot market" phenomenon, meaning that that are a larger number of IPOs when the market is doing well. In the first nine months of 2013, there have been 63 IPOs, a 110 percent increase from same period last year. At the beginning of October, there were 116 IPOs in the pipeline that are expected to raise a total of $37 billion. During the third quarter, 92 percent of the IPOs were filed under the JOBS Act, which permits a confidential initial filing for emerging growth companies. The third quarter also continued IPO underpricing, with global IPO underpricing averaging 24.4 percent.