2021 Starts with Continued Momentum in the IPO Market

Riding the momentum of last year’s strong initial public offerings (IPOs) activity, Nasdaq ushered in 91 companies with a 76% overall win rate in the first month of 2021, as companies continue to bet on a robust market in the new year.

Out of the new listings, 67 were special-purpose acquisition companies (SPACs), and 3 were switches. Additionally, in the month of January, the top three IPOs by proceeds raised were listed on Nasdaq and seven of the top ten IPOs by proceeds raised were listed on Nasdaq.  

Last year, Nasdaq reached a new high in the number of IPOs and proceeds raised, welcoming 316 IPOs that raised $80.9 billion in capital. This was mainly due to a surge in the number of SPACs, which have grown in popularity over the past decade. In 2020, the number of SPACs more than quadrupled from the year prior, Nasdaq’s Chief Economist Phil Mackintosh found recently.

Keeping up with last year’s IPO wave, Nasdaq welcomed 48 IPOs that raised over $14 billion in the first half of January. This was a huge uptick from last year’s comparable period that saw three IPOs, Jeff Thomas, Nasdaq’s senior vice president and head of West Coast listings noted in a recent Bloomberg interview.

“When you look at it, the capital markets are very richly valued right now so the window is wide open,” he said, adding that out of the 48 deals in the first two weeks of January, ten were operating companies that raised over $5.5 billion and the rest were SPACs that raised over $8.6 billion dollars.

“We’ve got over 250 active SPACs out there looking for targets now," Thomas said. "So, I think one of the other big stories this year will be all of the business combinations that will be coming into the markets as well.” 

Below we highlight a couple of companies that joined Nasdaq in January.

Affirm Holdings (AFRM)

The “buy now, pay later” fintech company saw its shares almost double after offering 24.6 million shares at the price of $49 a share, which was above its targeted range of $41 and $44. The California-based company raised more than $1.2 billion on its first day of trading.

Petco Health and Wellness Company (WOOF)

The pet care products company, which has been in service for more than five decades, issued 48 million shares at a price of $18 a pop, up from its estimated range of $14 to $17 per share. Petco shares spiked around 60% on its opening and the company generated around $864 million.

Poshmark (POSH) 

The shares of online marketplace Poshmark soared around 150% in their stock market debut. Offering 6.6 million shares at a price of $42 each, up from its targeted range of $35 and $39 per share, the company raised more than $277 million.

Playtika (PLTK)

The Israel-based mobile game developer sold 69.5 million shares at a price of $27, up from its estimated range between $22 and $24. Its shares were met with enthusiasm on the first day of trading, and the company raised around $1.88 billion.

Vinci Partners Investments (VINP) 

The Brazilian asset manager offered its IPO of 13.9 million shares at a price of $18, the upper end of its targeted range, which was between $16 and $18. The company is the sixth Brazil-based IPO to list in the U.S. since 2019 and it raised around $250 million.   

Qualtrics (XM)

The cloud software vendor soared around 40% on its first day of trading after pricing its IPO above its estimated range of $27 and $29. The company priced its shares at $30 a pop and sold around 51.7 million shares, raising around $1.55 billion.

Shoals Technologies Group (SHLS)

The solar-power company saw its IPO jump nearly 40% on its opening. It offered 77 million shares at a price of $25 a piece, up from its expected price range of $22 and $23. It raised nearly $1.93 billion, delivering the largest IPO of the year.

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