US IPOs point to pickup in deals demand

Three US initial public offerings priced on Wednesday at the top of their ranges in what will be a test of the health of the listings market this year.

Virtu Financial, one of the world's largest high-speed traders, online craft marketplace Etsy, and Party City, a party supplies chain, are set to trade on Thursday. With indications of healthy demand in the IPO prices, strong debuts could rekindle enthusiasm in the market after a slow start to the year.

Just 41 US-listed IPOs have raised $6.7bn so far this year - the slowest pace since 2010 and a sharp drop from 94 deals that raised $20bn in the same period a year ago, according to Dealogic. Last year was a particularly busy one for listings.

Virtu raised $314m in an IPO that priced at $19, people familiar with the deal said, giving the group a market value of $2.6bn. The New York group last year delayed going public when the publication of the controversial book Flash Boys by Michael Lewis focused on the complex US equity market. Mr Lewis claimed the system was "rigged" against investors and benefited high-speed traders.

As a market maker Virtu makes money on the spread between buy and sell orders and executes more than 5.3m trades daily on global markets, from equities to commodities and currencies. Virtu disclosed in its filing that it has lost money on just one of the last 1,485 trading days, but the statistic is largely due to the size and frequency of its bets in the market. Just under half of trades are profitable.

Proceeds from the sale are earmarked to buy shares from pre-IPO investors such as Silver Lake, the US private equity firm. Different share classes will enable founder Vincent Viola to control 95 per cent of voting rights after the IPO.

Etsy sold its shares at $16 each versus a range of $14 to $16, according to people familiar with the deal. The IPO will raise about $267m for the company and selling shareholders, and give Etsy a market value of about $1.8bn.

At a time when many tech-related companies are opting to raise money in the vibrant private market, Etsy has said in regulatory filings that the main purpose of its IPO was "to increase our visibility, create a public market for our common stock and facilitate our future access to the public equity markets".

Party City sold shares at $17 after setting a range of $15 to $17. The deal raises $372m and give the retailer a market valuation of nearly $2bn.

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