Capital Markets

A Rare Firm Preparing an IPO Pulls Out

Madison Square Capital REIT is the 12th would-be initial public offering to be cancelled or delayed this year.
Stephen TaubMarch 16, 2009

Last week’s stock market rally has been leaving some observers skeptical about its staying power. Among the cynics may be those few companies planning IPOs.

Madison Square Capital Inc., for one, placed on hold its planned $200-million initial public offering due to market conditions, according to its underwriter. The real estate investment trust specializing in mortgages backed by U.S. government agency backed mortgages, is the twelfth IPO to be either canceled or postponed so far this year, according to Reuters. The REIT initially had announced plans to raise up to $300 million back in April 2008.

Reuters pointed out that no IPOs are currently scheduled for pricing.

So far this year just one company has gone public: Mead Johnson Nutrition Co., which priced its shares at $24 back in mid-February. The stock is currently trading for $27, up 12.5 percent.

Madison Square Capital earlier had planned to price its shares the same week that Mead Johnson’s were priced. Last year, 43 companies priced initial offerings, according to Renaissance Capital. However, just one company went public in the final four months of the year, meaning that just two companies have priced their stocks since August 2008.

Renaissance also said that just three companies have filed for IPOs this year, down from 150 last year and 374 the year before. The calculation, however, doesn’t reflect the recent stock market rally.