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CohnReznick Study: Q2 2014 IPO Activity Continues Upward Trend; Despite Growth, U.S. on Track to Only Complete 280 IPOs in 2014, Far Behind Economic Potential


NEW YORK, NY – Despite their recognized value as economic engines, the number of Initial Public Offerings (IPOs) in the United States, although improving over the first two quarters of 2014, is far from the number required to accelerate growth in the middle market, according to new research released today and commissioned by CohnReznick LLP, a top ten accounting, tax, and advisory firm dedicated to helping middle-market companies with liquidity events and capital formation. The U.S. is on track to do only 280 corporate IPOs in 2014, less than one third of the total number that researchers estimate should be completed, based on GDP growth, to support the broader economy.

“With 74 Corporate IPOs completed in Q2, the conventional wisdom is that the IPO market has re-established itself in the aftermath of the recession as the JOBS Act and an improving economy ease the process of raising equity capital,” said Dom Esposito, Partner and National Practice and Growth Director at CohnReznick. “The reality is that the U.S. must do better, and has historically performed better, at encouraging IPO activity in order to better fuel economic and job growth.

 “Structural market changes such as decimalization have contributed to an IPO Gap, particularly in the middle market. The results of a recently announced SEC pilot program testing the impact of increased tick size on less liquid and smaller capitalized stocks will be closely watched to gauge its value in stimulating middle-market IPO activity,” Esposito said.

View InfographicAccording to the report:

  • While the absolute number of IPOs in 2014 is higher than in recent years, it is still less than half of what supported the U.S. economy before the dot com bubble, according to the report. It has been estimated that the U.S. should now be doing more than 900 IPOs a year based on this larger economy of which 80% should be less than $80 million in size.

  • The report revealed that there were more corporate IPOs in Q2 (74) than there were in Q1 (66), and there were more corporate IPOs (140) through the first half of 2014 compared with the first half of 2013 (75).

  • The number of sub $50 million IPOs decreased to 10 in Q2, representing only 13% of all corporate IPOs transacted for the quarter and emphasizing the need for additional forms of capital stimulation for the lower middle market.

  • The number of IPOs transacted by middle-market companies (companies with market caps of $100 million to $1 billion) was flat from Q1 to Q2. There were 47 IPOs in each of the first two quarters of 2014.

  • Healthcare and technology remain prominent sectors for middle-market financing activity, representing almost 76% of Q2 Corporate IPOs and 56% of follow-on transactions.  This has a particularly large ripple effect on the economy since economists estimate that as many as five local service sector jobs ranging from doctors and teachers to wait staff and sales clerks, are created for every one technology and biotechnology sector job produced.

  • The number of investment banks underwriting sub $50 million IPOs has decreased by 84% from 20 years ago. In 2013-4, only 27 investment banks participated in sub $50 million IPOs. While in 1993-4, 166 investment banks participated in sub $50 million IPOs.

The full study and research will be released later this month and will be available at

About CohnReznick
With origins dating back to 1919, CohnReznick LLP is the 10th largest accounting, tax, and advisory firm in the United States, combining the resources and technical expertise of a national firm with the hands-on, entrepreneurial approach that today's dynamic business environment demands. CohnReznick serves a large number of diverse industries and offers specialized services for Fortune 1000 companies, owner-managed firms, international enterprises, government agencies, not-for-profit organizations, and other key market sectors.

Headquartered in New York, NY, CohnReznick serves its clients with more than 280 partners, 2,500 employees, and 26 offices. The Firm is a member of Nexia International, a global network of independent accountancy, tax, and business advisors. For more information, visit

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Sabrina Strauss or Bennett Kleinberg
Goodman Media International

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