Private companies are making their Wall Street debuts at a record clip this year.
There already have been more initial public offerings through the first three quarters of 2021 than there were in all of 1996 — the best year ever for IPOs, according to FactSet. In the first nine months of this year, 785 companies have gone public in the US, compared to 664 for all of 1996 — the dawn of the internet stock mania — and 555 last year. Dating app Bumble, plant-based milk company Oatly and online brokerage giant Robinhood are among the more high-profile “unicorn” companies to go public this year.
Red-hot shoe seller Allbirds made its debut Wednesday, too, and the stock soared nearly doubled. Startups are taking advantage of low interest rates and other stimulus from the Federal Reserve, investors’ insatiable appetite for rapidly growing startups and the boom for so-called blank check special purpose acquisition companies, or SPACs. SPACs have become popular ways for companies that are looking to go public with a little less regulatory scrutiny.
Richard Branson’s Virgin Galactic (SPCE), DraftKings and the scaled down WeWork have all gone public by merging with a SPAC. Former President Donald Trump has plans to merge his new social media firm with a SPAC, too. Some big firms also are choosing to go public through direct listings of shares on Wall Street exchanges. Roblox and Coinbase both issued stock directly instead of selling new shares in an IPO. Of course, not all IPOs soar once they started trading. And even those that enjoy solid debuts tend to taper off.