Review of TSX Venture Exchange New Listings Activity in 2012

Each year the TSX Venture Exchange publishes a summary of its “new listings” activity.  New listings include IPOs, qualifying transactions through the Capital Pool Company program, companies completing a reverse takeover and companies moving up from the NEX exchange or down from the TSX.  Here are some random reflections after reviewing the data for 2012:

  • In 2012 there were a total of 236 “new listings” compared to 334 in 2011.  I would not think the reduction in new listings activity comes as a shock to anyone that works in or follows public markets in Canada.
  • Of the new listings in 2012 there were 121 IPOs.  44 of those were traditional IPOs of operating companies (vs 47 in 2011) and the other 77 were IPOs of Capital Pool Companies (vs 112 in 2011).  The rate of traditional IPOs is fairly steady year over year.  The year over year drop in CPC formation would seem to line up with market sentiment over a good portion of 2012.
  • In 2012 there were 61 CPC qualifying transactions completed on the TSXV compared to 87 during 2011.   It would be interesting to know whether there is a causal relationship between this statistic and the drop in CPC formation during 2012.  For example, did the drop in qualifying transactions in 2012 lead to a drop in interest in forming a CPC or was it the other way around?  It is not possible to say from reviewing the publicly available data but with CPC formation and qualifying transactions accounting for 60-65% of new listings activity on the TSXV over the last couple years, any drop in CPC activity hurts the Exchange.
  • In 2012 there were half as many Reverse Takeovers on the TSXV as in 2011 (18 in 2012 vs 36 in 2011).  I would hazard a guess that this is closely tied to the general drop in investment activity that was felt by market participants in 2012.  If doing an RTO will not open up new sources of funding for private enterprises it greatly reduces the incentive.

All in all, the 2012 TSX Venture Exchange new listing statistics do not reveal any surprises and seem to confirm what those of us who work with companies in the public markets felt in terms of market sentiment and availability of capital during much of 2012.  Here’s hoping for a pick-up in 2013!

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