Europe is facing a stalling economic recovery, the threat of ISIS to the Middle East and elsewhere has urged President Obama to send forces back into Iraq, and Russia seems determined to annex Ukraine as Ebola roils in Africa. Despite all this terrible news, it was a banner year for initial public offerings on Wall Street.
This year saw the trading debuts of GEs Synchrony Financial consumer lending division, GrubHub, Lending Club and FibroGen, but perhaps the king of all IPOs in 2014 was Chinese online merchant Alibaba, which raised an estimated $25 billion in its September debut. Some observers noted that they havent seen such activity and excitement on trading floors since the dot-com days and its irrational exuberance.
The Alibaba IPO had an impact on the overall markets. According to figures from TABB Group, the options market saw volume hitting a whopping 1 billion contracts in the third quarter. In its “U.S. Options Market Review: Third Quarter 2014” report, TABB Group also reported that the U.S. options volume rebound was driven in part by a 15.8 percent jump in September’s total as retail fervor around Apple’s iPhone 6 announcements, the Alibaba IPO and rising volatility brought monthly volume to 365.9 million contracts.
With all of these IPOs comes the speculation of where the next IPOs will take place − NYSE or Nasdaq? NYSE has had the reputation for being a solid, reliable if fusty Wall Street platform, while Nasdaq gained ground for its glitz and forward-thinking technology. But perceptions changed after Nasdaqs recent tech glitches; it fumbled the debut of the hotly anticipated Facebook IPO in 2012, and suffered a three-hour trading outage in August 2013, a one-two punch that industry observers suggest helped NYSE win the coveted IPO of social media darling Twitter in 2013.
It was a wake-up call for everyone, said Kevin McPartland, senior analyst for Greenwich Associates. Nobody wants that to happen again. And now that NYSE is under the umbrella of ICE, which is a company and a CEO known for their innovation, we could be confident that NYSE would be ready for the Alibaba trading debut.
Although the Facebook fumble still stings − Nasdaq CEO Robert Greifeld recently said that he longs for the days of a puff piece − the market-maker is not an IPO pariah, not by a long shot. In the third quarter of 2014, Nasdaq welcomed 76 new listings, including 41 new IPOs. The market-maker also brought a total of 140 IPOs to the market in Q3, an 8 percent increase in listings compared to the same quarter in 2013. The combined proceeds year-to-date were approximately $16.7 billion.
Right now, firms have one month to make their debut before the end of 2014. Three companies declared their IPO wishes in mid-November: OnDeck Capital, the Web-based lender to small businesses; software analytics firm New Relic; and Hortonworks, a Hadoop data firm. But these firms dont have the lip-smacking allure of Shake Shack, which might join the billion-dollar IPO club before the end of the year.