Daily Management Review

Following A Frantic 2021 Beginning, Slowdown In IPOs Globally In Third Quarter


Following A Frantic 2021 Beginning, Slowdown In IPOs Globally In Third Quarter
According to Refinitiv statistics, the amount of initial public offerings (IPOs) worldwide dropped in the third quarter of 2021 from their earlier frantic pace, but the number of public listings during the first nine months of the current year was still the most since the dotcom boom of 2000.
During the third quarter, a total of $94.6 billion was raised through IPOs, a 26.3 per cent decrease compared to the value achieved in the second quarter, with slowing down of activity because of the summer slowdown and the monitoring of Chinese listings by the United States after Beijing's crackdown on Didi Global Inc after just a few days of the company launching its US IPO.  
So far this year, with private firms hurried to match the skyrocketing values of their publicly traded rivals a total of $421 billion has been generated globally by more than 2,000 initial public offerings (IPOs), which is a record number. 
This was more than double the amount raised over the same time period the previous year.
This figure includes the IPOs of 486 special purpose acquisition companies (SPACs) which were rampantly used to get publicly listed in the first nine months of this year, which raised a total of $127.7 billion in funds. 
"After record levels of SPAC IPO activity in the first quarter, that market has taken a needed pause. However, we are seeing early signs of that market begin to normalize and open up for the right issuers," said David Ludwig, global head of equity capital markets at Goldman Sachs Group Inc.
Included in the high-profile IPOs launched during the third quarter of this year were the trading app Robinhood Markets Inc's $2.1 billion offering in New York and South Korean software company Krafton Inc's $3.7 billion debuts on the Korean stock exchange.
Tencent-backed Chinese internet video business Kuaishou Technology Co Ltd's $5.4 billion IPO is the highest so far this year.
In July, U.S. Securities and Exchange Commission Chair Gary Gensler requested a "pause" in Chinese company IPOs in the United States, as well as more openness regarding their offshore structures and regulatory risk in China. As a result, Chinese listings in the United States came to a halt.
In the first seven months of 2020, Chinese listings had reached a record $12.8 billion In the first seven months of 2020.
Even as values were scrutinized more thoroughly, tech listings remained investor favorites. Stock market newcomers, on the other hand, had a more diverse mix of sectors. In Europe, a highly anticipated debut on the Amsterdam stock exchange was made by Taylor Swift's record label Universal, becoming the most valuable firm to list this year for the continent.
Volvo Cars is also likely to go public, while Daimler is slated to float its trucks division in order to broaden the offering for stock market investors.
According to Ludwig, IPO activity may increase up in the fourth quarter.
"The backlog (of IPOs) across the street is very robust, across regions and sectors," he said.