IPOs Could Come Roaring Back Next Week
The high-flying initial public offerings market is expected to resume next week when several companies are slated to go public. Many high profile deals, including offerings from Airbnb, DoorDash, and Bumble, are also seen trading later this year or into 2021.
Right now, IPOs are still on pause. No traditional IPOs have traded since Nov. 3, the date of the presidential election. Two biotechs—In8bio and Compass Therapeutics—were expected to go public Friday. In8bio postponed its deal due to market conditions, Barron’s has learned. Compass has yet to price its IPO and it’s unclear when that will happen. In8bio and Compass did not return messages for comment.
New issues went on hold running up to the presidential election. The IPO window was expected to open up again later this month, and going into December, as long as the presidential election wasn’t contested. Joe Biden has been projected the winner of the U.S. presidential election, but uncertainty about the transition process remains. President Donald Trump has refused to concede and has claimed without providing evidence that widespread voting fraud occurred.
The pause comes during a roaring time for new issues. The IPO market has seen 352 companies go public as of Nov. 13, raising $130.3 billion, Dealogic said. That figure is more than double the $57.4 billion collected by 190 IPOs for the same period in 2019, the research firm said. Many of the IPOs this year are special purpose acquisition vehicles, or SPACs. Of the 351 new issues, 178 were SPACs, Dealogic said.
Not everyone sees problems with the current pause in the IPO market. “We’re very much on schedule as expected,” said one banker, who is working on several IPOs that are anticipated to price soon. “As far as I’m concerned, the election has not had any impact on the issuance window that I’m targeting to hit. The market is very much there.”
“The IPO window is still open for business. The market is working,” said Kathleen Smith, a principal with Renaissance Capital, who pointed to the calendar for new issues. Several companies are on tap to go public next week. This includes Soterea Health, Aspire Real Estate Investors and Telos.
Many high profile IPOs are expected to trade later this year and into 2021. The most anticipated deal comes from Airbnb, the home sharing network, which is slated to make public its registration statement next week, Barron’s has reported. Airbnb plans to price and list in December. DoorDash made public its IPO registration statement Friday, setting up the company to go public in mid-December.
Bumble has picked underwriters for its initial public offering. The dating app backed by Blackstone Group (ticker: BX) has tapped Goldman Sachs (GS) and Citigroup © to advise on its IPO, which could come as early as the first quarter, Barron’s has learned. Morgan Stanley (MS) is also working on the offering. Bumble will seek a $6 billion to $8 billion valuation. Bumble declined to comment. Executives for Citigroup and Goldman declined comment.
And, Better.com has picked Morgan Stanley and BofA as underwriters for its initial public offering, Barron’s has learned. The online mortgage lender reportedly plans to file confidentially with the Securities and Exchange Commission as soon as January. Better.com declined comment. Morgan Stanley declined comment.
The biggest test for the IPO market comes next week. If any of those deals trade poorly “that would be a dampener on the market,” said the banker, who emphasized that each IPO must be evaluated individually and on its merits. Underwriters who bring a company to market that is mediocre and get the valuation wrong, should “expect to be punished for it,” the person said. Companies that are priced accurately, should “be able to enter the market without much volatility,” they said.
There are a few on my radar now:
Blue Origin (Bezos backed), because SpaceX will never happen
Coinbase, for the digital currency exchange/platform it provides. Theil talked about digital currency in his book…interesting to have non governmental monies…
Robinhood…maybe for the initial pop
Chime, neo bank app, most valued fintech from what I read