Blame the tight credit markets and fear of recession: IPOs hit a 50-month low in January. According to the Telegraph, "figures showing the extent of the slump come as investment banks across the world are cutting jobs on expectations of a continued lull in activity over the coming year. " M&A activity has also hit its slowest pace since late 2004.
The real damage from the slowdown may be to investment and large money center banks. Now that mortgage-related write-offs have damaged their balance sheets, they might have hoped that earnings from underwriting and M&A divisions could help with earnings in 2008. It looks like that will not happen.
Financial executives will be looking for more lay-offs at their firms to try to offset falling revenue. That means the loss of high-paid jobs in cities like New York, London, Paris, and Zurich.
A depression may be coming to the M&A sector.
Douglas A. McIntyre is an editor at 247wallst.com.
Closing Bell: Economic Catapult for Thanksgiving & Black Friday (WMT, TGT, GRMN, GOOG, MSFT)
Deere up on Q4 earnings performance
Reid Hoffman: LinkedIn will go public (at some point)
Reader Comments (Page 1 of 1)
2-03-2008 @ 4:01PM
John said...
Maybe lower oil prices will spur more drilling IPOs.