It seems like it has been a great time for new IPO stocks this quarter. From a very slow Q1 to Q2 becoming the most active quarter (based on the number of deals) over four years, the first half of 2019 has been quite a surprise to many investors.
While there had been forecasts suggesting more than 200 new IPOs to happen in 2019, Q2 saw 62 companies going for IPO. These new stocks raised total capital $25 billion. This is the highest capital raised within the past 5 years. The rate of return on an average was 30%. This signifies a great start to going public. There were a few major industries that dominated IPOs in Q2 like technology and biotech. While IPOs of energy-based companies and the financial sector fell way below average.
New IPO Stocks Raise Eyebrows
The IPO investors are in for quite some benefits with initial price being reasonable even though below than the competitors publically traded ones, claims Kathleen Smith an IPO tracker at Renaissance Capital. The best performer in the IPO market includes Beyond Meat (BYND)- a plant-based food maker which is up by 542%. Pinterest (PINS) (+38%) closely followed second. Zoom Video (ZM) (+140%), Slack (WORK) (+39%), Chewy (CHWY) (+50%), and CrowdStrike (CRWD) (+89%) also gave a notable performance.
However, the most anticipated IPO of $8.1 billion the Uber IPO (UBER) disappointed the market by a fall in value of 8% on the first day. The Lyft IPO, a competitor of Uber, shared the same fate and is down by 12%. These are just exceptions in the plush IPO market in Q2. Presently, there are 60 companies hoping to raise about $11 billion, the majority of which has been already filed. Among these 60 include WeWork, Peloton, Postmates, Casper, Poshmark, and Airbnb.
If this bullish IPO market trend continues, then, it could mean a record braking year. The record stands at $96.9 billion raised from 2000. This is probably a prime time for private companies to venture into the public market domain.