U.S. IPO's have weakest quarter since Q3 2003

By Phil Wahba

NEW YORK (Reuters) - The market for initial public offerings in the United States suffered its worst quarter since the third quarter of 2003, as canceled IPOs easily outpaced the number of new offerings, according to preliminary Thomson Reuters data.

The second quarter saw only 14 IPOs, raising $4.7 billion, slightly more than one-fourth of the proceeds from a year earlier and barely besting the third quarter of 2003 when 20 IPO's totaled $4.2 billion.

Perhaps more ominously, the number of new deals was dwarfed by the quarter's 25 IPO cancellations, as issuers preferred to wait for market conditions and the economy to improve.

Proceeds from the first quarter's IPOs totaled $20.6 billion, but almost all of that came from the $19 billion Visa Inc (V.N) offering.

The IPO data from Thomson Reuters exclude special purpose acquisition companies, which typically go public before purchasing an operating company.

But until the tight credit market and overall economy stabilize, there is little chance of seeing the IPO market rebound, experts say.

"Both corporations and investors are making the reasonable judgment that this market is unsettled," said Mark Hantho, head of equities and capital markets at Deutsche Bank. "To wait it out is a more pragmatic approach."

He added: "It's going to take time. For a bona fide lift in IPO activity, we will have to experience greater stability in the underlying equity markets."