After a decline in the number of new listings from 2022, will the IPO era return?
Last year’s IPO market recorded disappointing results, despite the rally in the second half of the year. This was evident not only in terms of volume but also with regards to the returns of new companies launched on the market. However, optimism for 2024 could spur an increase in the number of IPOs, if not even an appreciation of the shares of the stock market launches that took place in 2023.
Among the most discussed topics of 2024, there is the Reddit IPO and speculation on the Stripe IPO.
IPOs between 2022 and 2023
In 2022, there was a marked decline in the number of IPOs, due to the difficulties faced by the US stock market, which strongly discouraged many companies from going public. 2023 followed this trend, closing with approximately 141 IPO, despite a recovery in stock markets in the second half of the year. Not surprisingly, the average returns of IPOs launched between 2022 and 2023 were negative, confirming the positive historical correlation between the number of IPOs and the increase enthusiasm in the markets, which in 2023 has not fully materialized.
As a result, the market is watching with interest the prospects for IPOs in 2024, as in the case of the post-pandemic recovery of 2021, the year in which the market for new listings experienced an explosion, as well as the performance of IPOs in previous years.
It must be recognized that IPOs in the information technology sector have been an exception, thanks to the contribution of artificial intelligence, and have offered their investors positive returns, as in the case of Arm Holding (ARM), probably the most debated price of last year.
It is impossible not to refer to the failure of Birkenstock, whose IPO was memorable for its $1.5 billion launch.
While ARM recorded a gain of almost 50%, BIRK suffered a loss of 6% in a market context described as an "overall rally". What to expect from the IPO market in 2024: the case of Reddit and Stripe
Will 2024 be full of IPOs?
However, not all experts are positive about the IPO market for 2024.
This arises from the fact that, despite expectations of an increase in the number of new listings, periods of high volatility generally tend to discourage investors from allocating capital to IPOs, due to their often high volatility.
However, the situation looks different for companies with a more established background, such as Reddit and Stripe. Although nothing is yet certain, there is a lot of speculation among various analysts regarding the possibility of launching an IPO for these two historic web companies.
Original article published on Money.it Italy 2024-02-26 20:33:00. Original title: Il 2024 sarà l’anno delle nuove IPO?
