On August 5, 2011 the Standard & Poors announced a decision ...
On August 5, 2011 the Standard & Poors announced a decision to give its first-ever downgrade to U.S. sovereign debt, lowering the rating to AA+. That change completely shut the window on the IPO market. In hindsight, the IPO market was lucky this occurred in August. Traditionally, it’s not a period of high activity, so there was roughly six weeks to recover from this blow. Nonetheless, the market was put on ice until an unlikely IPO showed everyone the water was warm enough to jump in again.
$Ubiquiti(UI.US$, a telecom equipment company, surprised some market participants at launch given it had lost a lead left bookrunner while going through the SEC clearance process which in normal course could delay a company’s IPO for months. However, UBS stepped up and brought the company to market on Oct. 13th in a $105.6 million IPO that traded up 17% on the first day and 30% by day 30. This wasn’t the high-profile, name-brand unicorn that many people expected would reopen the market. Notably, highly anticipated games company $Zynga Inc(ZNGA.US$ priced its IPO roughly two months later in December.
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