Confetti and bells herald US equity listings

Bells crafted by sellers of online marketplace Etsy rang the open for their Nasdaq listing while confetti poppers marked the debut of Party City at the New York Stock Exchange on Thursday.

The duo, together with high-speed trader Virtu Financial, marked their arrival on US markets with the "pops" sought from buyers of initial public offerings.

The price performance of the newly minted public companies should give heart to market participants looking for a boost to the US listings market, which has experienced a slow start to the year.

Shares of Etsy opened at $31, nearly doubling the IPO price of $16. The move was the third-largest opening "pop" this year behind the debuts of Shake Shack and Spark Therapeutics, according to Dealogic.

Virtu Financial and Party City were both up about 20 per cent in early trading.

Investors embraced Etsy's mission to "reimagine commerce" with a "human, authentic and community-centric global and local marketplace", as stated in its regulatory filings. The company uses quirky one-off items and homemade goods, such as small knitted hats to keep boiled eggs warm and a wine rack shaped like a dinosaur to differentiate itself from ecommerce giant Amazon.

Total revenue increased to $196m in 2014 from $125m a year earlier but net losses widened.

At a time when hot tech companies, such as Uber, are opting to raise money in the vibrant private market at attractive valuations, Etsy said 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".

"We wanted our Etsy community - sellers and people who love etsy - to be able own a piece of Etsy via the public market," said Chad Dickerson, Etsy's president and chief executive.

Virtu overcame a high-profile delay of its listing aspirations last year after the publication of Flash Boys by Michael Lewis portrayed high-frequency traders as part of modern market structure that was "rigged."

"This is a great opportunity for us to go out to the buyside [investors], including some that have been very vocal critics. We understand there has been a certain narrative out there. What is described in the book is not representative of what Virtu Financial is all about," Doug Cifu, Virtu's chief executive, told the FT.

The average one day pop for US-listed IPOs so far in 2015 is 14 per cent. That is up from 13 per cent last year, but less than 17 per cent increase in 2013.

The number and amount of IPOs this year has lagged, with the broad market up just over 2 per cent.

Just 45 US-listed IPOs have raised $7.7bn 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, Dealogic data show.

"The first quarter is seldom what I would call the most predictive," said JD Moriarty, head of Americas equity capital markets at BofA Merril Lynch. "It is usually not the most active quarter for IPOs. Companies are waiting for their full-year financials. It is always busier in the second quarter and ultimately post Labor Day."

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