‘Tricky’ IPO market impacted by price volatility

Author: Olly Jackson | Published: 3 Oct 2018

Investors are becoming more selective due to the vast number of geopolitical concerns, but pricing remains the number one threat to the initial public offering (IPO) market.

"The IPO market has become very tricky," said a managing director of a global investment bank. "My sense is the market has been price sensitive for some time and that sensitivity is taking a while to feed through to issuers."

While deals are taking place, the real measure of strength is whether the large ones are succeeding. Upcoming IPOs include Funding Circle and Westwing; the latter considered to be a test case for the strength of the market as a whole going into next year. Initial signs are looking relatively positive.

Aston Martin, with shares for its IPO due to be traded this week, had a stock price of 20.7x its first half earnings. While the price per share has since fallen by 6.6%, the...