In fewer than six months, there has been a new record hit for U.S. initial public offerings (IPOs), U.S. News reported.
There are still six more months before 2021 ends, and IPOs have already reached $171 billion, which is more than last year’s record of $168 billion, according to U.S. News, which cited Dealogic data.
Corporate valuations have hit a new high amid the pandemic, seeing inflation because of stimulus checks and the Federal Reserve’s low interest rates, U.S. News reported. Because of that, a wave of speculative fervor has arisen in which the traditional companies going public have benefited alongside special purpose acquisition companies (SPACs).
The second half of this year could see IPOs going through the roof, according to U.S. News. There are several high-profile startups that will be going public, including Didi Chuxing, the largest ridesharing company in China. Robinhood, a popular online brokerage, will be among them, too, along with electric vehicle maker Rivian Automotive.
“If the markets hang in anywhere near where they are right now, we are going to be incredibly busy this summer and into the fall with IPOs,” Morgan Stanley Co-Head of Equity Capital Markets for the Americas Eddie Molloy told U.S. News.
Molloy said it is tough to predict whether the current surge will last long term — “trees don’t grow to the sky forever,” he said — but the wave being seen now will likely roll into 2022 as well, U.S. News reported.
Traditional listings of big names, excluding SPACs, have already raked in $67 billion this year, according to U.S. News. As such, 2021 will likely be the biggest year for these types of IPOs.
IPO prices have experienced some friction lately, though, with the prices seeing a slowdown in investor interest around the end of May, PYMNTS reported. Some investors have been moving away from IPOs due to the volatile stock market and fears of inflation abound. The changes have prompted some companies to delay their IPOs.