February 26, 2015
By Marc Fogarty, CPA, CFE
The past three years have shown an increase in IPO activity, with 273 IPOs in 2014. IPOs continue to be prominent in the tech and health care sectors, as I have mentioned in past blogs, due to an upturn in those markets. Conversely, there are concerns that the IPO market will not fare as well for other sectors.
With low oil prices and a surplus in global supply, some have predicted a decline in energy IPOs this year. So it was a bit of a surprise to see Philadelphia Energy Solutions listed on the NASDAQ as a recently filed IPO. According to their website, “PES processes approximately 335,000 barrels of crude oil per day, making it the largest oil refining complex on the Eastern seaboard.” Time will tell if their decision to go public in a volatile market was a gamble worth taking.
It has also been predicted that tech IPOs will be on the rise again in 2015 and that prediction appears to be off to a good start! The new year heartily welcomed the online file storage company, Box, as one of the first tech companies to enter the market in 2015. With an IPO price of $14 a share, Box closed significantly up on its first day of trading, at $23.23 a share. This resulted in Box having a market value of $2.7 billion, which surpassed the $2.4 billion valuation announced last summer.
Perhaps there won’t be an IPO that can even come close to last year’s record breaking star, Alibaba, but there is still plenty of opportunity on the horizon. If the market remains strong, more companies may decide that 2015 is the right time for an IPO.