Companies around the globe are rushing to go public, with the highest deal value in the first three months of 2021 than in the past 20-plus years, the Financial Times reported on Wednesday (April 28).
So far in 2021, there have been 875 initial public offerings (IPOs), each notching a minimum of $1 million, according to Dealogic data, per FT. The previous IPO record was at the end of the dotcom heyday in 2000, with 592 filings that raised at least $1 million each during the same period.
Proceeds from public listings this year totaled $230 billion, a new record. The last peak in 2000 raised $80 billion. Worldwide IPO proceeds so far in 2021 have blown past the full-year totals for 21 of the previous 26 years.
“The numbers are encouraging because they’re evidence that people have renewed confidence that public markets are a good way to exit their business,” Carlton Nelson, co-head of corporate broking at Investec, told FT. “It shows that they don’t have to tap into private capital despite it being easier and more efficient than it has been for a long time.”
Special-purpose acquisition companies (SPACs) have been the driving vehicle to take companies public, accounting for close to 50 percent of IPO funding this year. The majority of filings — about two-thirds — have been in the U.S., followed by China, with 8 percent of new filings, and Hong Kong with 5 percent.
Although SPACs have accounted for the majority of filings, the number of SPAC listings has dropped off recently after the Security and Exchange Commission (SEC) said earlier this month that warrants issued by SPACs should be considered liabilities rather than equity instruments. Further restrictions by the SEC are in the works, PYMNTS reported on Tuesday (April 27).
Chinese companies are listing at a record pace in the U.S., raising $6.6 billion for companies from Mainland China and Hong Kong, eight times more than the same period in 2020.
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