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Fundamentals

Size Analysis: In summary, there has been a notable decline of new public companies entering the market from the last quarter to 2Q2023. Specifically, there are now 121 less public companies compared to the previous quarter. However, it's essential to highlight that despite this decrease in the number of public companies, the market capitalization has experienced a substantial growth, rising from $10.5 trillion to $11.5 trillion. This represents a significant and noteworthy increase in market value.

Public Market Dynamics: During this quarter, we observed remarkable extremes in Year-over-Year returns for various segments, including the industry as a whole, the SPY (S&P 500 Index), the top 20 companies, and the bottom 20 companies.

- The industry as a whole exhibited a substantial increase of 43.87% in its Year-over-Year returns.

- The SPY, representing the broader market, recorded a notable increase of 14.92% in its Year-over-Year returns.

- The top 20 companies displayed remarkable growth in their returns, with a significant increase of 42.34%.

- Much like the top 20 companies, the bottom 20 companies also displayed a growth, experiencing a notable drop of 24.85% in their Year-over-Year returns.

These extreme fluctuations in returns across different segments of the market are worth analyzing further to gain a deeper understanding of the underlying factors driving these dynamics.

Transaction Trends: During this quarter, there were 158 more transactions reported compared to the previous quarter. In the last quarter, there were 1102 transactions, while this quarter witnessed 1160 transactions. What distinguishes this quarter is the noteworthy trend: the total transaction value was nearly cut in half, marking an drastic decrease of $44 billion. This shift in transaction value indicates significant changes in the nature and scale of deals occurring during this period, which merits a closer examination.

Dispersion Insights: The geographical distribution of transactions across the globe has remained consistent. Despite variations in the number of transactions, the proportional market share of each region has remained unchanged. Asia continues to maintain the largest share of the industry, accounting for 32%. In contrast, Oceania represents the smallest portion of the industry at 4%. Europe holds a significant 18% share, with no discernible change from the previous quarter to the current one. This stability in regional distribution highlights the enduring market positions of these geographic areas and provides valuable insights into the global landscape of these transactions.

Methodology

We screened CapitalIQ using its industry classification. Transactions were filtered by announce date within the last 3 years. Companies were filtered by having a public company type. The main industry selected was "Information Technology". CapitalIQ sectors "Technology Hardware and Equipment" and "Semiconductors and Semiconductor Equipment" were used to screen the database. CapitalIQ sectors "Technology Hardware and Equipments" and "Semiconductors and Semiconductor Equipment" were used as categories. Our sectors were defined by keywords from the CapitalIQ market intelligent industry classification.

THIS REPORT IS NOT TO BE USED OR CONSIDERED UNDER ANY CIRCUMSTANCE BY ANYONE AS INVESTMENT ADVICE

This research report is for informational and discussion purposes only. Information presented here is not investment advice of any kind to any person and does not constitute a recommendation as to the purchase or sale of any interests or as to any other course of action. General, financial, and statistical information concerning the details of this report and related industry are from sources Spaulding Financial believes to be reliable.

Spaulding Financial has accurately reflected such information in this research report; however, Spaulding Financial makes no representation as to the sources’ accuracy or completeness and has accepted this information without further verification. Neither all nor any part of the content of this report may be conveyed to the public through advertising, public relations, news, sales, mail, direct transmittal, or other media without the prior written consent of Spaulding Financial. Spaulding Financial ’s research is as of the date reported herein.

Spaulding Financial has no affiliation with any of the companies comprising the industry used as a basis for research in this report, nor does Spaulding Financial hold any investments in the companies listed herein. The content of this report may be used, in part, as a basis for any work that Spaulding Financial performs for you in the future at the sole discretion of Spaulding Financial. All data is from Capital IQ database.

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