Why are retail company IPOs peaking?

Retail IPO volume

The strength of Europe’s stock markets over the past two years has encouraged a surge of retail IPO’s. With high valuations and many business models facing long term challenges from the internet, there is an incentive for owners to reduce exposure (by selling out) and to raise funds to adapt to the challenge from online retailing.

The surge in IPOs can be viewed as being both positive and negative. One of the most fundamental roles of capital markets in society is to raise capital for businesses in the realworld. However, the fact that it has surged implies that “insiders” potentially see the current market levels as being high and are therefore willing (and trying) to sell a lot of paper in their companies to the market.
Rajesh Shant, investment manager, Newton’s global equity team

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