This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Like Stocks, IPO and M&A Markets Slow to 2011 Lows

Stocks in this article: GSMSJPMCBACCSDBBCSUBSKKRBXMHSESRX

NEW YORK ( TheStreet) - Just as stocks hit 2011 lows Monday, evidence arrived that the IPO and M&A markets have seen activity slow to their worst levels of the year. And unless overall financial conditions improve and the volatility gets dialed back, the deals drought could give way to a freeze.

According to quarterly numbers released by financial data firm Dealogic, global mergers and acquisition activity fell 19% in the third quarter, the poorest performance of the year after rising by more than 20% in each of the first two quarters of 2011. After starting on the best merger pace since 2008, M&A is now tracking at its worst level since the second quarter of 2010, making the risk of a double-dip in the deal market for 2011 a reality.

While falling back from the highs of this spring and summer, M&A is still growing for the year. Even counting this quarter's fall, deals are up 9% to $2.18 trillion compared to this time last year, Dealogic said. Whether the market will post growth this year overall though is a close call.

To break even for the year, another $640 billion in mergers will need to get done in the final quarter of the year -- a number that won't be easy to reach considering the deterioration that took place from July through September.

The IPO market isn't as hard to judge. It's already a bear market for companies trying to sell their shares to the public.

Global IPO activity has totaled $142.5 billion so far in 2011, down 8% from last year's equivalent total. The third-quarter contribution of $27.6 billion was the worst since the second quarter of 2009 when the economy was just about to emerge from the worst recession since the Great Depression.

It's also likely that IPO markets will continue to stall. Fearful of volatile stock markets and the low valuations investors are willing to pay for shares, companies pulled 221 offerings to go public in the first 9 months of the year, the highest number of withdrawn or postponed IPOs since 2008 when the global economy hung on the precipice. The data also reflects the summer's over-optimism that the bull market that drove stocks to near-term highs in late April would continue to last.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,805.41 +127.51 0.76%
S&P 500 1,964.58 +13.76 0.71%
NASDAQ 4,483.7150 +30.9230 0.69%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs