Register of IPO surges that will be launched in 2021

After a brief hiatus, activity in new numbers resumed in late May after the Federal Reserve indicated it would take extraordinary steps to boost the economy and the stock market rebounded due to a strong declivity. Several actions that debuted then skyrocketed, setting the stage for a race to public markets that, after a brief holiday break, is expected to recover in the new year.

The companies raised $ 167.2 billion through 454 bids on U.S. stock markets this year through Dec. 24, compared to the previous year’s record of $ 107.9 billion at the peak of the points boom. -as in 1999, according to Dealogic. The coronavirus pandemic turned the typical pace of the IPO market, with $ 67.3 billion raised in the fourth quarter. That is, about six times the total for the first three months of the year.

As a result of the uproar, proponents of the 21st century economy, including Airbnb Inc.,

Per Dash Inc.

and Palantir Technologies Inc.

they are now listed on the stock exchange and are accessible to the average investor.

The IPO market gained momentum from a surprising increase in special purpose acquisition companies, or SPACs, empty vehicles that raise money through listings and then look for companies to merge with. They represent a commitment for a still unknown business to generate strong returns and typify the appetite for risk that feeds new issues and markets more broadly.

Nearly half of all fundraising in the IPO market went to SPAC, and the total raised through SPAC this year is almost double the number of vehicles raised in 2019, the previous year of registration.

The stock market frenzy peaked in the second week of December, usually a quiet time for new deals as the end of the year approaches, when Airbnb and DoorDash more than doubled. on its first day of trading. This gave the two companies, which have not yet made a steady profit, valuations that reach tens of billions of dollars.

These gains raised eyebrows among some who worry that the IPO market is overheating and draw parallels with the period before the bursting of the Internet bubble in early 2000. They point to an increase in interest among individual investors, many of whom use a popular brokerage application managed by Robinhood Financial LLC. As they say, if history is a guide, they say, these investors can rush to the exits as soon as markets reverse course.

Colin Stewart, Morgan Stanley‘s

Head of global technology equity markets, said investors have an “unlimited interest” in certain stocks, particularly those that have captured the imagination of retail investors. “Movements and valuations of certain stocks are not necessarily based on the fundamentals of the business,” he said.

These concerns were evident when two companies that were scheduled to debut following Airbnb and DoorDash — Roblox Corp. and point-of-sale lender Affirm Holdings Inc. — decided to delay their listings. Roblox officials, in particular, were worried about leaving money on the table in case the video game platform also had a big pop on the first day, according to people who know the subject.

Not all newcomers receive a warm welcome from public investors. The week after Airbnb and DoorDash debuted, for example, the parent company of e-commerce site Wish closed below its IPO on the first day of trading.

Few bankers predict that the current pace will slow soon. A lot of companies more than a billion dollars, like Robinhood itself, the bitcoin exchange Coinbase Global Inc. and Instacart Inc. food delivery service, waiting on the wings. Many more international companies, such as the South Korean e-commerce company Coupang Corp., are also considering listing on US stock exchanges.

And the SPAC frenzy is likely to continue. Outstanding investor in SoftBank Group technology Corp.

filed for a potential SPAC in late December. The Japanese conglomerate is studying the possibility of marketing at least two more in 2021, according to people who know its plans.

The activity began in late May, when the largest offer since the start of the pandemic, the IPO of the SelectQuote insurance policy comparison site Inc.

raised $ 570 million after setting prices above the initial range. Shares rose 35% on the first day of trading.

Several companies followed, which gave investors bigger wins. Vroom Inc.,

an online used car salesman who debuted in early June and Lemonade Inc.,

an insurance company that happened about a month later, more than double on its first day of trading. The performance encouraged more companies to push ahead with plans for new numbers.

This year’s technology IPOs, the backbone of the new emissions market, have recorded the largest gains in their first trading day since 2000, with an average of 34% compared to 65% then, according to Dealogic. (Overall, IPOs have jumped by about 18% on the first day of trading.) On average, 2020 IPOs have increased by approximately 48% over their original prices.

Extreme interest in some IPOs, while others are fading, has made it especially difficult for subscribers to find the right price for the shares in which they debut.

Take Snowflake Inc.

It went public in September at a price of $ 120, or about three times what the data storage company pointed out when it began trading the shares to investors. The shares still doubled on the first day of trading and recently rose more than 150% relative to their IPO.

As a sign, companies continue to experiment with new ways to access public markets, Palantir and the smaller technology start-up Asana Inc.

they debuted without raising money. So-called direct quotes, which have only been used by four large companies, are expected to gain popularity in 2021 after the Securities and Exchange Commission declared in December that it will allow issuers to raise capital when they use them to make themselves public.

Whatever the method, the interest of startups in making it public shows no signs of diminishing. John Chirico, co-director of US banking, capital markets and Citigroup advice Inc.,

he said companies “see the benefit and value of being public as they have never had before.”

Write to Maureen Farrell to [email protected]