Following a fast-paced July, Nasdaq anticipates robust activity for initial public offerings (IPOs) this fall. As we move through the summer months, Nasdaq welcomed 74 IPOs in July alone, including 53 operating companies, such as disruptors Robinhood and Duolingo.
The IPO activity builds upon the 410 new listings in the first half of the year, and Robinhood (HOOD), which raised $2.1 billion, closely follows Bumble as one of the largest IPOs by proceeds raised this year. Language learning company Duolingo (DUOL) also had a strong debut last month, pricing its shares at $102 each, well above its initial target range of $85 to $95. Beyond traditional IPOs, Lucid Motors (LCID) completed its merger with Churchill Capital Corp IV, a special purpose acquisition company (SPAC).
Nasdaq Stock Exchange President Nelson Griggs noted in a recent interview with Bloomberg Markets: The Close that companies are “very excited” to have a variety of ways to go public, including traditional IPOs, SPACs and direct listings.
“If you look at the traditional IPO, it had not changed much in 30 years. Now, if you’re a private company, you do get to think through what is best for you,” Griggs said. “Currently, the majority are choosing the IPO route, but there are certainly opportunities with all of the SPACs in the market right now to consider what that could mean for valuation. And then I think with direct listings, while there’s still a very small handful, that has been picking up more this year than ever.”
This optionality will be top of mind for many companies in the IPO pipeline. Griggs acknowledged that there will likely be fewer IPOs in August compared to earlier this summer, partly due to investor fatigue, but he expects activity to ramp up once again from September through the end of the year.
“Markets depending, we’re going to have a really active fall,” Griggs recently told Cheddar. “We have a very active September and fall lined up, where there is going to be more enterprise technology companies. We have a whole group of consumer names, and, as we have seen this year already, the biotech and healthcare pipeline has been pretty phenomenal, and that will see some activity in the fall too.”
“We are at about a 75% win rate; we’ve had about 60% of the capital raised on Nasdaq; we’ve had some big transfers with Honeywell this year. So, we’ve had a pretty good momentum here, but we don’t take that for granted,” Griggs noted during the interview with Bloomberg.