The trend in IPOs is down in the third quarter, after a frenetic phase at the beginning of 2021.
Initial public offerings (IPOs) slowed overall in the third quarter of 2021 from their frenetic pace at the beginning of the year. By contrast, the number of listings in the first nine months of the year was still the highest since the dot-com bubble of the 2000s, according to Refinitiv, a financial markets data provider.
IPOs in the third quarter of this year raised a total of about $94.6 billion, down 26.3% from the second quarter, as activity slowed due to the summer period and the financial standoff between China and the US.
More than 2,000 IPOs have raised a total of $421 billion worldwide so far this year, a record, as private companies scramble to match the sky-high valuations of their publicly traded peers. This is more than double the revenue raised in the same period last year.
High-profile IPOs in the third quarter included the $2.1 billion listing of the app Robinhood Markets Inc in New York and South Korean software company Krafton, which raised more than $3.7 billion on the Korean stock exchange.
IPOs in the third quarter suffered from the rivalry between the US and China. In July, Gary Gensler, chairman of the Securities and Exchange Commission, called for a “pause” in Chinese IPOs in the US. As a result, Chinese listings in the US have come to a halt.
Technology listings are the big winners in this quarter’s IPOs. They continue to be favoured by investors. Companies such as Taylor Swift Universal, which was highly anticipated on the Amsterdam stock exchange, made a strong debut and did well. Volvo Cars is also expected to launch an IPO, while Daimler is expected to list its truck unit to diversify the offering for stock investors.
According to David Ludwig, global head of equity capital markets at Goldman Sachs, IPOs should pick up in the fourth quarter. “The backlog (of IPOs) across the street is very strong, in all regions and sectors“, he said.
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