At the beginning of the year, Wall Street analysts forecast an impressive number of IPOs in US stock markets. No one, however, could expect such results. The first half of the year is not over but the last year's record has already been beaten. Let's dig in the detail.
IPOs attracted $171 billion over 6 months
On June 15th, Reuters, quoting a financial and analytic company Dealogic, reported that the volumes of IPOs in the USA had set a new high. In 2020, IPOs in the USA attracted $168 billion - and in the first semester of 2021, the result was over $171 billion.
Also note good statistics of average day profit from the IPO price and average week profitability. This year, these parameters amount to 40.5% and 35.7%, respectively, which is significantly higher than a year and two years ago. For example, in 2020, the average day profit was 28.2% and the average week profitability - 32.2%. In 2019, these values were 21.7% and 25.5%, respectively.
The main reasons for such great IPO results in the USA should be high estimations of companies in stock markets, credit and monetary stimuli in the COVID-19 pandemic, and low interest rates of the Fed.
Thank you, SPAC
Speaking about crazy IPO volumes this year, note a real boom of listings via mergers with SPACs. These are special companies created solely for further mergers with private businesses.
In the first half of 2021, 339 SPACs were created. They gathered $105 billion. Note that the general IPO volume is $171 billion. Compare: in the whole of 2020, SPACs gathered $83 billion, which was less than 50% of the whole sum attracted by IPOs.
Forecasts for the second half of 2021
According to Reuters, analysts expect the volumes of IPOs to hit a new high in the second half of the year. This viewpoint is expected by the anticipated success of the IPOs of a popular online broker Robinhood Markets, a carsharing and taxi service Didi Chuxing Technology, and an electric car manufacturer Rivian Automotive.
In the second semester, IPOs are expected to attract at least $250-300 billion. Hence, over the whole of 2021, IPO volumes in American exchanges will exceed $400 billion. Eddie Molloy, the head of the share markets department of Morgan Stanley, is sure that in 2022, the speed of listings will remain record.
According to Reuters, IPO volume in the USA in the first half of 2021 exceeded the result of 2020, reaching $171 billion against $168 billion. Some $105 billion of them were gathered by mergers with SPACs. Analysts promise that these statistics will keep growing fast the next year as well.
What else to read about IPO on R Blog?
- Weber Inc. IPO: Best Barbecue Ever
- IPO of Duolingo, Inc.: a New Level of Learning Foreign Languages
- IPO Paycor HCM Inc: Human Capital Management in the 21st Century
- IPO of Robinhood Markets: Noble Bandits of Financial Markets
- IPO of DiDi: Taxi in a Chinese Way