Breaking Down This Week’s Massive IPO Rush

The US IPO market is hot this week.

Fifteen initial public offerings are scheduled by Friday.

It’s the busiest week since May 2019, when Uber went public, according to Renaissance Capital, a provider of IPO exchange-traded funds and institutional research, cited by “CNBC.”

Together, these IPOs are expected to raise about $8 billion.

The big star is Snowflake, which is poised to be the largest software IPO this year, raising $2.9 billion, with a $37 billion market capitalization. It will start trading Wednesday, September 16. 

Already this year, 113 companies went public in the US and raised $38.4 billion.

In general, newly traded companies are doing good. 

The Renaissance IPO Index is up almost 60% this year the S&P 500 gained about 5%.

The index includes companies that went public in the US in no more than two years. The five top holdings today are Zoom, Uber, Pinduoduo, Moderna, and NIO.

Typically, retail investors can’t buy stocks before they begin trading on an exchange, since the pre-IPO shares are typically reserved for institutional investors. 

These newcomers in the stock market can offer good opportunities, but it is necessary to be prepared to deal with high volatility, even when they are pretty well-known companies.

Facebook is a classic case.

It went public on May 18, 2012. The IPO failed to meet expectations, and the stocks closed the first day of trading at $38.23, only 23 cents more than its opening price. 

In a few months, on September 4, it reached its all-time low of $17.55 less than 50% the IPO price.

Today Facebook is about $270 and one of the hottest stocks in 2020.

IPOs this week (from Sep 14):

  • American Well (AMVL) Thu
  • Athira Pharma (ATHA) Fri
  • Broadstone Net Lease (BNL) Thu
  • COMPASS Pathways (CMPS) Fri
  • Dyne Therapeutics (DYN) Thu
  • Equity Distribution Acquisition (EQD.U) Tue
  • Executive Network Partnering Corp. (ENPC.U) Wed
  • JFrog (FROG) Wed
  • Metacrine (MTCR) Wed
  • Pactiv Evergreen (PTVE) Thu
  • Snowflake (SNOW) Wed
  • StepStone Group (STEP) Wed
  • Sumo Logic (SUMO) Wed
  • Unity Software (U) Fri
  • Vitru (VTRU) Thu

 

IPOs next week (from Sep 21):

  • Amesite (AMST) Wed
  • Bentley Systems (BSY) Wed
  • Corsair Gaming (CRSR) Wed
  • GoodRx Holdings (GDRX) Wed
  • Laird Superfood (LSF)
  • Palantir Technologies (PLTR) Wed

 

dr. bauer