2021’s Burning Hot IPO Market Closes In On Last Year’s Record

2021’s Burning Hot IPO Market Closes In On Last Year’s Record
Andrew Rummer

almost 3 years ago1 min

A surge of companies seeking to list on US stock markets is putting 2021 on course to eclipse last year’s record for money raised in initial public offerings (IPOs) – and it’s not yet May. 

Four months into the year, 552 firms – many of them special purpose acquisition companies (SPACs) – have announced plans to raise a combined $166 billion, Bloomberg data shows. That’s closing in on the record $185 billion raised by 555 companies in the whole of 2020. 

Rather ominously, previous peaks came in 2007, before the global financial crisis, and in 2000, before the dot-com crash.

This flood of IPOs shows the enthusiasm investors currently hold for the US stock market. But bear in mind that it’ll likely be followed by a wave of selling from these companies’ early employees and investors, as their so-call lock-up periods expire – usually six months after the IPO is completed.

As investment bank Nordea pointed out in a report this week, the third quarter of 2021 is due to see a spike in lock-up expiries, potentially putting pressure on shares of those newly listed firms.

Chart of impending IPO lock-up expiries
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