Weak IPOs scare away the investors in US
The US IPO market has been going through a long period of suffering. And the main reason behind this has been a long list of weak IPOs.
The bearish market tendencies is the effect of failure of the equity underwriters and the below normal quality of companies which are coming to the capital market to raise funds.
The over-ambitious valuation plans and over-indulgence of private equity players in the market is scaring away the other investors. The PE players are trying hard to sell their stakes directly affecting the market confidence.
Analysts say this is the reason why so many deals are getting cancelled or are getting delayed.
Names of some of the major suffers includes Mitel Networks Corp from Canada, MIE Holding Corp, the Chinese oil company, Metals USA Holdings Corp, US metal company et al, who are facing the heat.
While Mitel sold 26.3 per cent lower than its expected range, MIE and Metals USA faced a falling confidence because of the private equity players selling their stake.
Analysts believe that the investors are looking for a positive return, but it will be some time before the market goes back to the original level.
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