Initial public offerings, or possibly more easily understood as a company’s launch on a stock market, have become food and drink for investors and turned founders into millionaires and in some cases billionaires.
In 2020, there were 407 IPOs in the US, which was double the number the previous year, Statista stated.
The CEO Magazine looks at the performance of the five biggest IPOs in 2020 and how the businesses are performing now. It should be noted that the S&P 500 index rose one per cent on Thursday, hitting a new high, as did the Dow Jones Industrial Average and Russell 2000 index of smaller companies.
Airbnb
The holiday rental online marketplace, founded by CEO Brian Chesky, Joe Gebbia and Nathan Blecharczyk in 2008, went public on 10 December 2020, with the IPO at US$68 (a share), and a market capitalisation of US$86.5 billion. It raised US$3.5 billion in the IPO.
While 2020 was dominated by the coronavirus pandemic, Airbnb still took 193 million individual bookings from more than four million hosts and 54 million guests, a 41 per cent fall in bookings on the previous year. Airbnb’s revenue fell 30 per cent to US$3.4 billion. Its share price was US$197.87 at the close of trading on Thursday.
Doordash
The food delivery service, founded by CEO Tony Xu, Andy Fang, Stanley Tang and Evan Moore in 2013, went public on 9 December 2020, with the IPO at US$102 (a share), and a market capitalisation of US$60.2 billion. It raised US$3.37 billion in the IPO.
In its first financial report since its IPO, Doordash took US$970 million in revenue over the final quarter of 2020, up from nearly US$300 million over the same period in 2019 as people locked in or under curfew from COVID used its service. Its share price was US$144.97 at the close of trading on Thursday.
Snowflake
The cloud-based data warehousing company received more than US$1.4 billion in funding before going public. Founded by Benoit Dageville, Marcin Zukowski and Thierry Cruanes in 2012, it debuted on the New York Stock Exchange on 16 September 2020. Stock began trading at US$245 per share, with a market capitalisation of US$67.9 billion, more than five times its US$12.4 billion valuation in February 2020, reported CNBC.
Snowflake’s revenue grew 119 per cent year over year to US$159 million in its fiscal third quarter, which ended on 31 October 2020, according to a financial statement. In the previous quarter it delivered 121 per cent growth. Its share price was US$237.81 at the close of trading on Thursday.
Palantir Technologies
The software company, founded by CEO Alex Karp, Peter Thiel, Stephen Cohen, Joe Lonsdale and Nathan Gettings in 2003, is famous for products Palantir Foundry, Palantir Gotham and Palantir Metropolis. It began trading at US$10 a share on the New York Stock Exchange after a direct listing on 30 September 2020. It had a market capitalisation of US$16.5 billion.
Palantir’s revenue increased to US$322 million and its total net loss fell to US$148 million in the quarter ended 31 December. It lost US$159 million a year earlier. Its share price was US$26.73 at the close of trading on Thursday.
Royalty Pharma
The largest buyer of biopharmaceutical royalties and a leading funder of innovation across the biopharmaceutical industry, Royalty Pharma was founded by CEO Pablo Legorreta in 1996. It launched an IPO of US$28 a share on 16 June 2020. The IPO raised US$2.2 billion and had a market capitalisation of US$16.7 billion.
Royalty Pharma reported fourth quarter revenue of US$572 million, a 25 per cent increase from the US$457 million reported in the same quarter of the previous year. Its share price was US$47.20 at the close of trading on Thursday.
New contender
The biggest IPO in years happened on the New York Stock Exchange on Thursday. Coupang, the South Korean equivalent of Amazon in the US, or Alibaba in China, raised US$4.5 billion. The stock soared 40 per cent to US$84 billion after the IPO, the highest capitalisation from an Asian company since Alibaba went public about seven years ago.
