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Recent IPOs in 2020: What’s happened so far?
Although there have only been a few so far in 2020, recent IPOs have proven just how much pent-up investor demand there is.
Debut stocks surge as companies tap pent-up demand
It took a while for the IPO market to come back online in 2020, with the coronavirus pandemic slamming the brakes on many planned stock market debuts. But recent IPOs have shown that the demand has not gone away. Many of the companies who have gone public have seen an explosion of interest in their stock.
In fact, according to Renaissance Capital, the first week of June was the first time in two years that all the IPOs held raised more than original expected, whether because they ended up pricing above their target range, or because they increased the number of shares on offer.
2020’s recent IPOs
JDE Peet held Europe’s largest IPO since 2018 when it went public at the end of May. The world’s second-largest packaged coffee maker raised nearly €2.3 billion. The investor roadshow was held virtually and it took just three days to sell all the shares – usually company management has to travel the world for at least a fortnight to meet investors and drum up interest.
ZoomInfo surged on its stock market debut. The company sold 44.5 million shares at $21 per share – above its target price range, which itself had been revised higher from an earlier range of $16-$18.
But even at the higher price investors snapped up the stock, causing it to open 90% higher on its first day of trading, with the first trade recorded at $40. This pushed the company’s market cap up from $8 billion to $14 billion.
Warner Music Group
The company sold 77 million shares – up 7 million from what was originally planned – at a price of $25 per share. This gave the company a market capitalisation of roughly $12.7 billion, and early trading on the day of the IPO saw this valuation surge 15% to just under $15 billion.
The company had initially signalled its intentions to go public in February, but the coronavirus pandemic meant this had to be delayed.
Pliant had to double its share offering ahead of its IPO at the start of June, with the company raising $144 million against initial plans for $86 million. The company has said the proceeds of the floatation will last it until 2023.
Vroom raced higher when the stock went public on June 9th. The company prices its IPO at $22 per share, raising just under $500 million, giving it a valuation of $2.5 billion. The stock surged over 100% on the first day of trading, hitting $45.
Some of these IPOs have seen huge demand, but there’s still plenty more to come – check out the biggest 2020 IPOs investors can’t wait for.
IPO 2020: The upcoming IPOs every trader should watch this year
2019 was a bumper year for stock market debuts, but the IPO 2020 market was unsurprisingly frozen by the coronavirus pandemic during much of the first half of the year. However, recent IPOs indicate that the market might be starting to thaw, and there’s lots on the horizon for investors to get excited about.
The lack of initial public offerings means that there is a huge amount of cash sitting on the side lines. Recent IPOs have shown that investors are desperate for the next big opportunity. Several big names that were expected to debut in 2019 are now likely to go public this year. Upcoming IPOs investors are hoping for include Palantir, Airbnb, and DoorDash.
In this article:
- 2019’s biggest IPOs
- Upcoming IPOs in 2020
- Airbnb IPO
- Palantir IPO
- DoorDash IPO
Uber, Lyft, Beyond Meat: Key IPOs of 2019
Uber and Lyft perfectly encapsulated the IPO market in 2019. These businesses were both “decacorns” – start-up companies with a valuation above $10 billion. Neither company was profitable, but investors were seemingly desperate to get hold the stock.
Lyft beat Uber to the punch, with shares trading publicly for the first time on March 29th. Uber listed on May 10th after having massively reduced its expectations – at one point the ride-hailing business had been expected to reach a valuation of $120 billion, but instead priced its IPO for a valuation of $75.5 billion. As of June 2020, Lyft was down over 50% on its starting price, while Uber was trading 13% lower than it’s debut.
Not every stock that went public in 2019 performed poorly. Beyond Meat was a breakout success. Since its debut the stock has surged over 140%. It is performances like this that make IPOs so attractive to investors.
By the end of the year, it was clear that markets were beginning to tire of companies with huge valuations but slim odds of reaching profitability any time soon. WeWork discovered this to its peril, after it was forced to abandon its plans to list publicly due to increased investor scrutiny over business practices and corporate structure.
Upcoming IPOs in 2020
There are many companies that are planning to go public in 2020, although there remains a lot of uncertainty as to how the coronavirus pandemic has affected these intentions.
In fact, many of the upcoming IPOs investors are discussing are from companies who have given no indication themselves that they are considering listing this year.
Here’s a look at some of the biggest planned, expected, or hoped for 2020 IPOs.
Airbnb IPO: Company to take advantage of turnaround in bookings?
Travel disruptor Airbnb was hit incredibly hard by the coronavirus pandemic as governments around the world initiated lockdowns to control the spread of Covid-19.
However, as global economies begin to reopen and lockdown measures are eased the company has reported a surge in bookings as consumers, tired of being stuck in their own homes, prepare for a domestic getaway. Between May 17th and June 3rd, the company saw more bookings in the US than in the same period during 2019. Bookings have also spiked in Germany, Portugal, South Korea, and New Zealand.
During April the company raised $2 billion in two separate tranches and cut staff numbers by 25% to help it survive the enormous impact of the pandemic. If the bounce back in bookings continues, markets may still witness the debut of Airbnb stock this year.
Airbnb launched in 2008 and now has over 150 million users who offer private rentals of apartments and rooms in over 65,000 locations across the globe. It includes Amazon founder Jeff Bezos amongst its early investors. By the end of 2019 analysts were expecting the Airbnb IPO to see the company achieve a valuation of $42 billion.
Palantir IPO: Secretive data company ready for the public eye?
While a Palantir IPO was rumoured in 2019, it has now become one of the most highly anticipated offerings of 2020, although it remains uncertain if the company intends to go public this year. Investors are desperate to get hold of Palantir stock despite the fact that much of the business remains shrouded in secrecy.
The big data company was founded by Peter Thiel in 2003, but is only just expected to break even in 2020, with the latest forecasts predicting $1 billion in revenue, up from $739 million in 2019.
The business does a lot of work with governments across the world, and has recently been involved with helping organisations such as the US Centres for Disease Control and Prevention and the UK National Health Service to monitor the spread of the coronavirus pandemic.
While chairman Peter Thiel told staff in September 2019 that there wouldn’t be a Palantir IPO in the next two or three years, the company began restructuring its employee compensation scheme this year to help it prepare for going public. According to various reports in June, Palantir was preparing to confidentially file for IPO.
Towards the end of June the company raised $500 million in private funding – likely to be its last round before it eventually goes public.
DoorDash IPO: Will confidential filing result in market debut?
With people trapped at home due to coronavirus lockdowns, food delivery services unsurprisingly saw a surge in orders. This has increased the scrutiny surrounding a potential DoorDash IPO. The company is believed to have nearly 40% of the food delivery market share in the US, operating in an intense sector against rivals such as Uber Eats and GrubHub.
The company last raised finance in November 2019, securing $700 million at a valuation of $13 billion. DoorDash announced at the end of February that it had confidentially filed for an IPO.
While this got investors excited, a confidential filing doesn’t necessarily mean there will be a DoorDash IPO. Rival delivery company PostMates filed for an IPO last year, but then decided to delay its public offering after raising additional capital privately.
A DoorDash IPO would give the company the capital it needs to defend its market share in the increasingly competitive market.