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.
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.
Of course, not all IPOs soar once they started trading. And even those that enjoy solid debuts tend to taper off.
But the surge in demand for regular IPOs shows that many so-called unicorns (startups with at least a $1 billion valuation) are willing to pursue the good, old fashioned way of going public.
That’s not likely to change anytime soon.
“An accommodative market backdrop and elevated valuations have encouraged issuers to go public,” said Rachel Gerring, IPO leader for EY Americas, in a report last month. “We are cautiously optimistic that these trends can continue through year end and into 2022.”
Electric vehicle maker Rivian and Brazilian digital banking giant Nu Holdings are both set to go public later this month as well.
“We expect the IPO market to finish the year strong, with a robust pipeline and ample … backlog to support issuance in the fourth quarter,” said analysts at Renaissance Capital, a research and investing firm that focuses on IPOs, in a recent report.