What to Expect From the IPO Market

There have been 483 IPOs so far in 2021. However, the market could be approaching a slowdown in the second half of 2021. Wealth Daily editor Monica Savaglia explains why that might not be a bad thing… There have been 483 IPOs so far in 2021. However, the market could be approaching a slowdown in the second half of 2021. Wealth Daily editor Monica Savaglia explains why that might not be a bad thing… [Wealth Daily logo] What to Expect From the IPO Market [Monica Savaglia Photo] By [Monica Savaglia]( Written May 25, 2021 As we are approaching the second half of 2021, let’s take a look at what we can expect from the IPO market for the rest of the year. Last week, there was some slowdown when it came to public debuts. There were only two IPOs and one direct listing. Those IPOs came from Procore Technologies (NYSE: PCOR) and Oatly (NASDAQ: OTLY), and the direct listing came from Squarespace (NYSE: SQSP). There were a few more IPOs scheduled for last week, but as the week progressed some inflation fears brought on stock sell-off, which resulted in some market volatility. This volatility led these companies expecting to go public last week to cancel their plans altogether. IPO research firm Renaissance Capital has reduced its expectations for the rest of the year when it comes to IPOs. Matt Kennedy, a senior strategist at Renaissance, said, “We’re beginning to see activity slow as aftermarket returns decline.” The firm also added that more than half of 2021’s IPOs — excluding SPACs — are now trading below their offering prices. It appears that the U.S. big comeback from the coronavirus pandemic has had a bit of a detrimental effect on the IPO market and retail investors. While it is very exciting that more people are getting vaccinated, returning to society, and doing activities and spending money like they were pre-pandemic, there's a chance that less money will be going back into the stock market or into people’s savings because the public won’t be receiving any more government stimulus payments. A lot of people were putting those stimulus payments toward things that they normally wouldn’t have spent their typical salary income on. Is This the End of the Bitcoin Boom? Bitcoin could crash soon. And even if you don’t have a single penny in cryptocurrency... YOU are going to feel the impact. The CEO of Kraken, a top crypto exchange, warns a “crackdown” is coming. The government is so afraid of cryptocurrency that some people worry Biden will ban Bitcoin using a shocking “backdoor” approach laid out in the document I want to show you. Investors who understand what’s behind all this stand to multiply their money as much as 60-fold. [Get the details in this urgent briefing.]( Extra income is always nice, of course, but obviously, it wasn’t something that was expected to continue. Maybe this means that people will go back to taking less risk with their money and they'll only be spending on (and investing in) things they feel confident they will benefit from. This is why we might have seen those companies hold off on their public debuts: because they might have been planning to go public while the atmosphere in the IPO market was robust — and at a time when investors weren’t so hesitant to invest and were willing to take a little more risk. Matt Kennedy had this to say: We’re still tracking a number of deals that I think are preparing for 2021 listings, just keeping in mind that at least over the next month, companies will need to either delay or come at attractive valuations to investors interested, given the new market dynamic here. Most recently, Marqeta, a card issuing platform that gives businesses tools to assist with building and managing payment programs, and Monday.com, the project management company whose platform helps improve team communication and productivity within a business, have filed their IPO paperwork with the SEC. Popular retailer and the original glazed doughnut creator, Krispy Kreme, filed confidentially for its IPO. We are still going to expect and see companies go public throughout the rest of 2021. We just probably won’t see the trends that we saw in 2020. There were 480 IPOs in 2020, and as of right now, in 2021 there have been 483 IPOs. These figures include SPACs. So while, yes, 2021 has surpassed 2020 in volume, I think in this second half we could witness a significant slowdown. Invest in Companies BEFORE They Go Public If you’re investing in stocks, especially in technology stocks, then you’re missing out BIG TIME! In fact, according to Inc., you’re missing out on "95% of the gains." For every $100 in profit those companies are making investors, you’re only getting five measly bucks. If that sounds unfair and you want access to the other 95% of the profits, then I’ve got an offer for you... Thanks to a recent act of Congress, the private markets where all those profits are taken, which were once off-limits to all but the super-wealthy and well-connected, are now open to all. [Just click here and you’ll learn how to get started today...]( Kennedy also mentioned: We could see more SPACs continue to poach IPOs, but just like with the IPO market, that environment is more challenging and they should see tougher valuation pushback from shareholders, who are less likely to approve any deal now regardless of fundamentals. We are seeing the environment for IPOs change and shift in the second half of 2021. While there were some really strong and compelling IPOs throughout 2020, there were also some that just went public to ride the wave of IPOs in an attempt to reap the rewards from an ambitious market. Now it appears investors are more interested in companies that indicate that their valuation matches their financials and that aren’t inflated or based on the “story” behind the company. Investors want to see tangible results and want to know that they're investing in a company that has something to offer them down the road, which isn’t a terrible thing to hold out for. Since companies are seeing this trend, they have to focus on their financials and how to build them up and appeal to potential investors before they consider going public. And that’s why we might start seeing a slowdown of companies going public throughout the rest of the year and maybe even into the next. But that's not necessarily a bad thing. Maybe now potential investors can focus on the companies planning their market debuts because the amount of IPOs in a week will be reduced. They can focus more on whether those potential IPOs not only have what it takes to have a successful public debut, but also have enough long-term potential to remain a strong investment in an investor's diversified portfolio. Until next time, [Monica Savaglia Signature Park Avenue Digest] Monica Savaglia --------------------------------------------------------------- Can Our Power Grid Survive Another Summer or Winter? It’s no secret that America’s aging power grid needs a serious upgrade. Especially after California’s rolling power shutoffs in August 2020 and then Texas’ blackout in February 2021. Grid failures can have expensive consequences. We’re talking about a $150 billion price tag on our economy due to outages. It can also have tragic consequences. Faulty cables can cause wildfires during the summers. 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