Summer's expected IPO stampede likely to fuel record year
A tidal wave of household names — like Robinhood and Krispy Kreme — is about to hit the public market.
Why it matters: Jitters that spooked some would-be public companies last month didn't last. Investors are now bracing for a summer "scorcher" that will reignite the IPO boom and likely fuel a record year.
What they're saying: "Early to mid-May, we were expecting IPOs to rapidly slow down this summer," says Matthew Kennedy, a senior strategist at Renaissance Capital.
- "We're once again preparing for a blowout year."
Flashback: The broad stock market sell-off last month — sparked by inflation fears — rattled the IPO market. At least three companies postponed going public to avoid the storm.
- The companies that went ahead saw less excitement from investors, on average, the Financial Times reported. This led to more subdued first-day share price "pops."
The bounce is back so far this month. Companies listed on the Nasdaq and NYSE have seen their share prices surge 33% on the first day of trading, according to Dealogic data. Compare that to May's 23%.
Where it stands: Last week was the busiest period for special purpose acquisition companies (SPACs) since March — with nine new blank-check firms raising $1.4 billion, according to Renaissance.
- It's a "dizzying week" for IPOs, Marketwatch notes. Among the higher-profile names: consumer genetics firm 23andMe.
What's next: Didi Chuxing, the colossal ride-share platform based in China, filed to go public last week. It could be the biggest U.S.-listed IPO since Alibaba in 2014 — and it's aiming to debut this summer.
- So might Robinhood, the free trading app at the center of the meme stock mania that captured the world's attention.
The bottom line: Stripping out SPACs, newly public companies could raise as much as $40 billion this summer, per banker estimates cited by the Wall Street Journal — shattering the record amount raised in the same timeframe last year.