Biggest IPO Wave in 5 Years Will Keep Rolling as New Stars Emerge

The presence of IPOs in May alone have already raked in $15 billion, marking the most raised in one month in nearly five years, when Chinese internet behemoth Alibaba Troop Holding Ltd. (BABA) raised $25 billion in its market debut. The record IPOs are likely to keep on rolling, celebrating the Street cheering, as a slate of strong performers begin to overshadow recently public Uber Technologies Inc. (UBER) and Lyft Inc. (LYFT), two contenders with their own industry-specific problems.

While Uber and Lyft’s share prices are down sharply from their IPO costs, a long list of other IPOs have performed quite well. The top performers include enterprise software provider Zoom Video Communications Inc. (ZM) and plant-based nourishment company Beyond Meat Inc. (BYND), which have seen their stock prices jump a whopping 150% and 215% from their IPO appraisals, respectively, according to a Wall Street Journal column.

While the dawn of the year was slow on the IPO front, thanks to December’s major market downdraft and the government shutdown – which made it unresolvable for companies to register new offerings with the SEC – activity has picked up at a rapid pace since March.

Alongside Zoom and Beyond Provisions, Pinterest Inc. (PINS) is also still up nearly 40% from its offering price, even after coming squat of earnings expectations in its latest quarterly report. On Friday, new listings from content delivery company Fastly Inc. (FSLY), chemical-materials maker Avantor Inc. (AVTR) and tech-enabled Chinese coffee tie Luckin Coffee Inc. (LK), all performed strongly.

A main factor for investors looking at IPOs is their “unit economics,” per bankers cited by the WSJ, implication their ability to generate revenue on each additional customer or transaction. Strong unit economics increases the take places that a company can turn a profit as it continues to scale up. The inability of newly public firms like Lyft and Uber to scoot a profit has ignited much skepticism from a growing group of ride-sharing bears on the Street.

According to Pitchbook, there are now nearly 100 “unicorns,” a name for privately held throngs with a value over $1 billion. While in the recent period, these venture-backed companies have determined to stay private longer, with the number of unicorns now four times greater than four years ago, they are now being pressed out into the public market, granting employees the ability to cash out on their equity stakes.

Upcoming IPOs allow for cybersecurity player CrowdStrike, business communications leader Slack Technologies, sharing economy giant Airbnb, co-working community and true estate company WeWork, big data analytics firm Palantir Technologies and payments provider Stripe, according to the Minutes, citing people familiar with their plans.

These IPOs should translate into big money for Block Street’s top underwriters. Outside of their traditional IPO roles, banks are set to make money off even direct listings, wherein a ensemble places existing shares directly on an exchange without raising capital. This is because investment banks accusation advisory fees worth about 75% of what they would normally charge for a standard IPO transaction, per the Quarterly. These fees are then divided among the advisors.

Slack, which is opting for a direct offering, is being admonished by Goldman Sachs Group Inc. (

Looking Ahead