Going public is a goal for thousands of companies in the payment processing, brokerage, cryptocurrency exchange, and automotive sectors. Surprisingly, in 2021 firms raised $453 billion while firms became publicly trading entities, with a total of 2,388 in deal volume. It is the highest, with the United States breaking deal volume records reaching about 1,100 businesses and capital funding closing at $260 billion.
Among those companies include Coinbase, Robinhood, and Rivian made the wave of IPOs (Initial public offerings) and direct listings after attracting investors. Reddit, Instacart, and Private Equity Firm TPG plan to debut going publicly this year. Venture Analyst Cameron Stanfill and Invest Chief Market Strategist Lindsey Bell provide their opinions of the IPO upsurge to Forbes at the beginning of 2022.
Cameron Stanfill told Forbes since 2010, IPO activities finally increased at a record high, with venturous capital reaching trillions of dollars invested in startups. As a result, he sees a trend of investment firms and firms seizing extremely-high public market valuations that will likely continue this year. He believes the public market valuation will likely skyrocket but is unsure about the increase in the deal value.
Stanfill explained that uncertain mega-deals such as Coinbase and Gen-Z opted outgoing public in March 2020 despite concerns of exuberantly spiked prices of post-IPO. He says payment service Stripe could help strike a new IPO record if the $100 billion startup company goes public before the end of this year.
Lindsey Bell has a different opinion on whether or not IPOs will roar or bust. While some professionals are hyping the surge, she informs that new stocks frequently present higher risks than those with longer terms. She discussed a few facts to validate her opinion including, Coinbase’s 75 percent increase in April 2021, after a retail investment hike. It was exciting at the time until shares eventually plummeted at a new record low, with retail on fire and cryptocurrency prices chilling since stocks increased the first quarter. Despite the surge, she noted that half of the firms listed on US exchanges from 2015 to 2019 traded below their IPO prices the following year.
Top Five IPOs to Watch out for in 2022
- Chime (Digital Bank)
- Discord (Online Chat Service)
- Impossible (Food Company)
- Instacart (Grocery Delivery Service)
- Reddit (Social Media Site)