IPOs started strong in 2015, then the stock market stumbled

Despite strong years for mergers and acquisitions and venture capital funding, the appetite for initial public stock offerings waned in 2015, especially in the second half.

According to Renaissance Capital, which tracks offerings in the U.S., the number of IPOs slipped to 170 in 2015, down from 275 in 2014.

IPO pricings were on pace to exceed 200 offerings for the third year in a row until the stock market tumbled by more than 10 percent in August. In the end, 170 companies completed initial offerings in 2015: 131 before Labor Day and 39 after.

The 170 offerings in 2015 raised a combined $30 billion, well off the $88.3 billion raised by the 275 offerings in 2014.

One Minnesota-based public company completed an offering last year: Plymouth-based Entellus Medical raised $78.2 million by selling 4.6 million shares at $17 per share on Jan. 29, 2015. In 2014, Minneapolis-based GWG Holdings completed the lone Minnesota IPO, raising approximately $10 million.

Minnesota hasn't produced more than two IPOs in a year since 2007 when four Minnesota companies completed offerings.

Entellus Medical's Xpress family of products are used by ear, nose and throat doctors to treat chronic and recurrent sinusitis. The minimally invasive procedure uses balloon sinus dilation to treat patients and is as an alternative to endoscopic surgery.

The positive first day return and the negative aftermarket return for Entellus mirrored national trends. The average first day return for all 170 IPOs in 2015 was 14.3 percent, but at the end of the year 57 percent of the IPOs were trading below their offering price, and the average return was -2.1 percent.

According to Renaissnce Capital, 118 companies at the end of 2015 had yet to complete a planned IPO which was a much smaller backlog than at the end of 2014 which suggests IPO interest at the start of the 2016 should be modest.

However, one Minnesota company, Tactile Systems Technology, filed an initial registration statement with the SEC last week.