Despite the pandemic, 2020 has been an active year for IPOs as tech and biopharmaceutical companies have taken advantage of increased investor interest. The demand for these IPOs was so high that almost every company started trading with a very strong price increase, up to 100%. Analysts expect even more financial market activity in 2021.
IPOs in early 2020 were overshadowed by the global COVID-19 pandemic, as companies faced uncertainty and massively canceled or rescheduled their IPO plans due to unfavorable macroeconomic conditions. However, the situation has improved since the summer, and in the fall investors have seen an IPO boom amid expectations of a recovery in growth and the emergence of vaccines against COVID-19.
In addition, experts note that more retail investors have come to the stock market, statistics from online brokers such as Robinhood have confirmed this. The reason is that the central banks of many countries have lowered interest rates to zero, which made the yields on bonds and bank deposits too low.
In 2020, about 400 companies entered the American stock exchanges, which during the IPO raised $ 218 billion.According to Bloomberg calculations, quantitatively, 1.8 times more than in 2019 and 36% more in terms of funds raised.
Shares after the IPO in 2020 grew by an average of 29% on the first day of trading, in contrast to the 15% growth in 2019 – by 15%. The Renaissance IPO Index, which reflects the dynamics of companies’ shares after the initial public offering, has shown an increase of more than 75% since June this year.
The ten most successful IPOs of 2020 are: Lemonade, Snowflake, BigCommerce Holdings, Unity Software, C3.ai, Palantir Technologies, Berkeley Lights, CureVac, Nkarta, Airbnb.
Lemonade insurance company
IPO Lemonade (LMND) took place on July 1 with a price of one share at $ 29, the amount of funds raised amounted to $ 319 million. covering it within 3 minutes. Read more about IPO Lemonade in Marketinfo.pro article “Lemonade Insurance Startup with Chatbot Wins Best IPO of 2020”.
The stock soared 139% to $ 69.4 on its first day of trading, and is currently 80% higher at $ 125.11 at Thursday’s close.
Snowflake cloud storage and processing companies
Snowflake (SNOW) IPO on September 16 became one of the largest IPOs in the history of software stocks. On the first day of trading, the stock rose 111.6% from $ 120 to $ 253.93, Snowflake raised $ 3.36 billion.
The Snowflake IPO hype has been largely fueled by large investments from companies such as Berkshire Hathaway and Salesforce Ventures. In addition, the company said it is committed to integrating with Salesforce products.
Snowflake is down 17% in the past two weeks, but the $ 323.04 price at Thursday’s close suggests a 41% gain over the past three months.
Software maker BigCommerce Holdings
The BigCommerce IPO (BIGC) on August 5 also became one of the largest technology company IPOs this year. On the first day of trading, the $ 24 stock jumped to $ 72.
BigCommerce stock peaked at $ 141 in late August, but has since returned to $ 72.8.
AI technology and software company C3.ai
C3.ai Inc (AI), which went public on December 9 with a stock price of $ 42, sells artificial intelligence software for the corporate market. During the IPO, C3.ai raised $ 651 million and the shares rose 120.2% on the first day of trading. At the close of trading on Thursday, the price was $ 161.
Investment firms rank C3.ai as one of the most promising companies in AI product development. Read more in the article “List of artificial intelligence stocks for surveillance and investment”.
Big data analysis software company Palantir Technologies
Palantir Technologies (PLTR) went public on September 30 through a direct listing on the NYSE. The stock was worth $ 7.25 and traded below $ 11 for nearly two months.
However, Palantir’s share price is now $ 27.75 (at the close of trading on Thursday), making this listing (the company’s initial market entry) one of the best performing in 2020.
Today, the Palantir software platform’s clients include US defense and intelligence agencies, as well as a number of international banks, healthcare, energy and manufacturing companies.
3D graphics and VR effects company for applications and video games Unity Software
During the IPO of Unity Software (U) on September 18, the stock rose 48% to $ 52 and the company raised $ 1.3 billion. Since then, the shares have skyrocketed and are now trading at $ 164.92.
The company estimates that half of the top 1,000 mobile games in the Apple App Store and Google Play were created using its platform, which has expanded to help game developers make money from ads.
IPO of biopharmaceutical companies in 2020
The IPO of the cell biology company Berkeley Lights (BLI) took place in July at $ 22 per share. After Berkeley Lights hit $ 103.38 Thursday, up 58% and showing significant gains for investors who bought the stock at the time of the IPO.
The IPO of CureVac (CVAC), which is working on the treatment of four types of cancer, as well as the COVID-19 vaccine, took place in August at a share price of $ 16. CureVac shares are up $ 101.73 today and the company has a market capitalization of $ 17 billion.
Nkarta’s (NKTX) IPO in July also had a strong debut, with the share price jumping from $ 18 to $ 58.7 on the first day of trading. At the close of trading on Thursday, December 24, the stock was trading at $ 69.17.
Airbnb online rental company
The IPO of Airbnb (ABNB), a world renowned rental platform, was one of the most anticipated IPOs of 2020 on December 10. Airbnb has more than doubled since its $ 68 debut, maintaining strong gains in its first two weeks of trading. However, over the past three trading days, there has been a sharp decline in shares to $ 154.84.
This year could also see a record IPO in history if China’s largest financial and technology company Ant Financial (formerly Ali Pay) went public. However, the IPO was suspended due to the introduction of changes to the antitrust laws in China and the tightening of control over large companies.
The number of listings in 2021 could be even more numerous given that the NYSE has received Securities and Exchange Commission (SEC) approval to conduct an initial direct listing of shares without underwriters. This will give small companies, startups the opportunity to conduct an initial public offering of their shares on the stock exchange less costly than an expensive IPO.