More initial public offerings are coming in the near future. Previous companies’ success with their IPOs through special purpose acquisition companies (SPACs) mergers seem to have lit the fire for more companies to follow suit. As of now, we might not see IPOs nor SPACs mergers dying down soon.
To note, in January alone we saw online commerce companies Affirm, Poshmark and Moonpig successful debut on the market. In the following month, Dr Martens, Kuaishou and Bumble also went public. Upon the public offerings, Kuaishou‘s shares more than doubled the initial price while Bumble gained 65% in around a week. This condition, Cristopher Austin of Paul Hastings told CNN, is what triggering more companies to go public. “Everyone right now that has the financials to go public are preparing to go public if the market remains strong. Conditions are still really good,” Austin said.
IPOs and SPACs mergers remain an interesting opportunity for both investors and companies
The success of IPOs surely does not come from the companies’ power alone. This phenomenon has also been receiving a warm welcome from investors. According to CNN, tech-heavy Nasdaq is near its all-time high with more than a 7% rise recorded this year. The surge is expected to come from more private companies with positive growth rushing to go public.
CEO of RiverNorth Capital Management told CNN, “the main driver of this resurgence is the strength of the equity market overall.” Hence, with more SPACs bringing good results, more companies will keep on going public through the back door and command higher valuations, Galley continued.
Read also: Get to Know SPAC, The Pillar of Startups during IPO
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