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January IPOs felt cold blast of US government shutdown

[SAN FRANCISCO] The only thing colder than January's polar vortex might have been US initial public offerings (IPOs).

While expectations of a banner IPO year might still be fulfilled, 2019 opened with the worst month since January 2016, thanks largely to the 35-day US government shutdown.

Only 60 IPOs priced globally, raising US$2.7 billion, according to data compiled by Bloomberg. That compared with 126 listings raising more than US$13 billion last January. For US exchanges, the picture was especially bleak with only six offerings raising a mere US$373 million, compared with US$6.2 billion a year ago.

Outside the US , IPOs kept some of their momentum. with 54 offerings raising US$2.3 billion. Still, that was only a third of the US$6.9 billion raised in 113 IPOs on non-US exchanges in January 2018.

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With a Feb 15 deadline for reaching a permanent deal to keep the federal government open, the prospect of a shutdown Part II continues to loom over US markets.

Some of the companies that have gone public have worked around typical US Securities and Exchange Commission (SEC) approval requirements by setting the price of their shares in advance. That included Rhinebeck Bancorp Inc., which raised US$48 million on Jan 16 and New Fortress Energy LLC's US$280 million IPO on Wednesday. San Diego-based Gossamer Bio Inc., deploying the same approach as a workaround under SEC rules, is set to officially price its shares on Feb 12, with a goal of raising US$230 million.

A renewed shutdown could cast a pall over Uber Technologies Inc.'s planned listing. That IPO could be among the top 10 of all time based on a possible valuation of as much as US$120 billion, according to people familiar with the company's plans. Uber, as well as its smaller ride-hailing competitor Lyft Inc., have been waiting for the SEC's feedback on their confidential IPO filings before making proposed terms public.

This year's other tech IPO candidates include Airbnb Inc., which a person familiar with the company has said is targeting an IPO sometime between June and the end of 2020. Slack Technologies Inc. plans to forgo a typical IPO and pursue a direct listing, a person familiar with the matter said last month.

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