When rapper Nelly belts out "it's getting hot in here” from his smash hit he could easily be talking about the IPO market.
Barry Diller, chairman of IAC/InterActiveCorp. (NSADAQ:IACI), said Thursday he will take The Match Group, which runs online dating site Match.com, public. This comes on the same day TransUnion (NYSE:TRU) begins trading after its IPO valued the credit scoring company near $4 billion.
June has suddenly become what may be the busiest month for initial public offerings since 1999. Just this week alone 17 companies are on the docket to go public.“All of a sudden someone pushed the IPO reset button,” said Kathleen Smith, manager of IPO-focused ETFs at Renaissance Capital, during an appearance on FOX Business Network’s Mornings with Maria.
Smith says the renewed interest to go public is all about returns, telling FOXBusiness.com in a separate interview, “it’s really about the price after the first day pop.” FitBit (NYSE:FIT) fits that bill; its shares have gained about 21% since debuting on June 18. Performances like this are helping IPOs beat U.S. stocks. The Renaissance US IPO (NYSE:IPO) ETF has gained 9% this year, compared to the 3% gain for the S&P 500.
Despite higher returns, companies have raised just $16 billion this year trailing the $29 billion raised during the same time period of 2014, according to Renaissance. University of Florida Professor Jay Ritter, known as "Mr. IPO" according to his bio, tells FOXBusiness.com. "Very few tech stocks have gone public," he also points out that investors "are supplying large amounts of equity capital to such firms as Airbnb and Uber, which allows the companies to rapidly expand without tapping public equity markets." He says this needs to change in order for the IPO market to see a meaningful pick-up.
That pick-up may come later in the year, “after the traditionally quiet third quarter” according to the EY Global IPO Trends: 2015 2Q report published Wednesday.
Along with Diller's Match.com IPO announcement, Freeport-McMoRan Oil & Gas, which is owned by parent Freeport-McMoRan (NYSE:FCX), also filed to raise $100 million yet experts suggest the deal could be valued as high as $1 billion. And earlier this week, Planet Fitness, the budget gym which describes itself as the fastest growing health club franchise in the U.S, filed plans for an IPO aiming to raise $100 million. The company which touts its trademarked phrases including “Judgement Free Zone” and “No Gymtimidation’’ could IPO this summer.