Burlington stores and RE/Max both had very good IPO debuts this week. It's been quite some time since I can remember the IPO market being significant to the point were two new issues were able to have good days on the same day.
Getting past the bubble conspiracy theories about the IPO market, and the overheated rhetoric about overheated markets, there's a bigger issue which often goes unnoticed even by Wall Street.
IPO markets are the most important markets ever.
Here's why: The IPO market and the secondary market are the very reasons for the stock markets to exist in the first place. So, to some extent, I look at the IPO market as a way of measuring the health and vitality of the rest of the market.
And if we are speaking strictly numbers, the health and vitality of the market has never been worse.
Ever. Ever as in the last decade. Or two.
Sarbanes-Oxley and a couple of other misguided "reforms" have effectively tamped down on both the IPO and the secondary market restricting capital the companies that most need it. And it's ironic that at the time that the rest of the world is increasingly embracing capital markets, that the United States would be heading in the opposite direction.
Since 1993 the total volume of IPOs offered through 2011 has shrunk by $4 billion while the number of offerings fell from 509 IPOs yearly to 81 yearly over the same period.
What these numbers mean, is that over a period of time when world wealth was growing from $25 trillion to $64 trillion, the number of initial offerings on what are supposed to be the greatest financial markets in the world-- USA, USA!!-- fell by 84 percent.
And 1993 was not one of the go-go 1990s years in the stock market either. Instead it was a stock market coming out of recession at 3,435 on the Dow Jones.
That ladies and gents is where our jobs have gone.
Quick, tell Obama.