A hot item on Wall Street over the past two years, initial public offerings or IPOs have been soaring, a rise that has been largely driven by the ultra-low interest rates, as well as a flood of cash from government stimulus during the pandemic that has helped send market valuations to record highs and increase interest for private companies to become public entities. The rising popularity of SPACs (special purpose acquisition companies) and start-ups desperate for cash have also boosted this IPO boom.
Despite the obstacles brought about by the pandemic, 471 companies including SPACs came to market in 2020, while 2021 has been even bigger, with a total of 976 IPOs listed from the start of the year through December 2, 2021. That's 505 IPOs more than the total number of those throughout all of 2020, which had broken the previous record set back in 2000.
Below is an outlook of the year’s top performing IPOs based on return since debuting on the stock markets.
Digital World Acquisition Corp (DWAC)
IPO price: $10.00
Current price: $51.38 (as of December 20, 2021)
Return: 400.60% (as of December 20, 2021)
Market cap: $1.90 billion (as of December 20, 2021)
It is the SPAC that has been on everyone’s radar, while it has generated quite the hype ever since it announced that it is entering into a merger agreement with Trump Media & Technology Group (TMTG), the company owned by none other than former president Donal Trump. Back in November when the joint announcement was made, TMTG was valued at $875 million, while the combined entity topped $1.7 billion. Aimed at taking on major social media platforms like Twitter (TWTR) and Meta Platforms (FB), Trump plans to launch what has been dubbed TRUTH social. Admittedly competition is tough, but when considering that the platform is targeting those on the right of the political spectrum, it does have the potential to amass a following and in turn make a great deal of money. Some analysts also believe that Trump himself tends to attract quite the attention and this could only be beneficial for the platform. What’s more, the company is set to have a high-profile CEO at its helm after Republican Congressman Devin Nunes opted to resign his seat in order to become CEO of TMTG.
Still, the company faces legal hurdles, with the planned merger itself being the focus of an investigation by the Securities and Exchange Commission (SEC), as well as the Financial Industry Regulatory Authority. But when considering that Trump’s company, The Trump Organization, has been resilient to these types of challenges, this could potentially mean that TMTG may be able to resist these issues.
Digital World Acquisition Corp completed its initial public offering in September 2021 and raised approximately $293 million in cash.
Want to find out more about SPACs? Have a look at the key differences between these and traditional IPOs.
Click here to add Digital World Acquisition Corp (DWAC) to your portfolio.
Zim Integrated Shipping Services Ltd. (ZIM)
IPO price: $8.00
Current price: $50.67 (as of December 21, 2021)
Return: 237.80% (as of December 21, 2021)
Market cap: $6.01 billion (as of December 21, 2021)
The Israel-based container shipping company may be a little-known firm to those unfamiliar with the industry, however, the company operates across the world’s major trade routes and has joined the ranks of the top 20 global carriers, offering seaborne transportation and logistics services, while its expertise in the industry spans 75 years. Zim Integrated Shipping Services went public on January 28, 2021, at a somewhat challenging time for the industry, as a spike in demand for goods relative to services during the COVID-19 pandemic caught the shipping industry off guard. This led to a bottleneck at ports, which have caused shipping delays across global supply chains. Having said that, the UNCTAD (United Nations Conference on Trade and Development) maintains that the pandemic’s impact on maritime trade volumes in 2020 was less severe than initially expected, however, its knock-on effects may be far-reaching and could transform the industry.
Yet, Zim Integrated Shipping Services managed to turn the tide, seeing solid earnings estimate revision activity over the past month, which may suggest that analysts are becoming somewhat more bullish on the stock and the company’s prospects in both the short and long-term. Indeed, the firm tapped into the disruptions caused by the pandemic and saw them as an opportunity to promote its flexibility and agility as an asset-light shipping company and as a result, it attracted investors’ cash through its IPO.
Interested to invest? Add Zim Integrated Shipping Services Ltd (ZIM) to your portfolio.
Roblox Corp (RBLX)
IPO price: $45.00
Current price: $98.69 (as of December 21, 2021)
Return: 119.31% (as of December 21, 2021)
Market cap: $57.13 billion (as of December 21, 2021)
With 47.3 million active users as of the three months ended September 30, 2021, Roblox is one of the most popular video games amongst the five-to-12-year cohort. Launched in 2006 as a gaming platform focused on user-created games, initially the start-up saw little traction, however, its popularity has picked up exponentially over the last few years, taking the gaming industry by storm. Unlike other companies, many of which were brought to their knees due to the pandemic, COVID-19 has been good to Roblox and the gaming industry as whole, so much so that the former has achieved skyrocketing growth, while the latter added millions of users to its platform and has served as an important lifeline for children across the globe stuck at home.
More specifically, during the lockdown of 2020, Roblox added approximately 50 million monthly active users and 5 million active creators. Many creators are mere amateur Roblox enthusiasts, however, some have turned it into a full-time job, while the platform is also attracting professionals, like the Swedish game studio, the Gang, which focuses on building high-quality Roblox games for PC, mobile and Xbox.
Roblox debuted on the New York Stock Exchange (NYSE) through a direct listing on March 10, 2021. At the time of its IPO, the company was valued at a staggering $45 billion, while on its first day of trading the stock closed up by 54.4%.
Time to buy Roblox Corp (RBLX) stock through Moneybase Invest.
Dutch Bros (BROS)
IPO price: $23.00
Current price: $48.20 (as of December 21, 2021)
Return: 109.57% (as of December 21, 2021)
Market cap: $7.88 billion (as of December 21, 2021)
A drive-through coffee chain, Dutch Bros had humble beginnings after it commenced its operations with a double-head espresso machine and a pushcart in Oregon. As stores have mushroomed across the board, its shops with its iconic windmill emblems are now located as far east as Texas and Oklahoma. And while pre-pandemic restaurant IPOs were not particularly sought after by investors, amid the pandemic, valuations increased alongside diner demand for eating out. As a result, a flurry of U.S. eateries have decided to go public this year, piquing investors’ interest and changing their appetite towards these stocks.
According to its earnings release back in October, Dutch Bros surpassed 500 shops with the opening of 33 new units, while the company is expected to open another 30 locations during the fourth quarter. What’s more, the firm believes that it has the potential to operate around 4,000 locations across the country within the next 10 to 15 years as it has currently reached less than 15% of its full brand penetration. Irrespective of its expansion plans, analysts appear to be optimistic about the chain’s small store footprint, while its lack of dining room space and beverage-only menu seems to be boding well for the business during the pandemic.
Dutch Bros launched its initial public offering on September 15 on the NYSE and was met with much enthusiasm by investors, driving shares up by more than 50% in just a few hours after its debut.
Add Dutch Bros (BROS) stock to your portfolio.
Affirm Holdings (AFRM)
IPO price: $49.00
Current price: $97.37 (as of December 21, 2021)
Return: 98.71% (as of December 21, 2021)
Market cap: $27.36 billion
A fintech company that operates a platform for digital and mobile-first commerce in the U.S. and Canada, Affirm is one of the leading pure-play buy now, pay later (BNPL) stocks, offering services that are considered an alternative to traditional credit cards. If you’re new to the concept, Affirm’s BNPL service works as follows – consumers buy a product or service from one of its retail partners through the Affirm app, the app assesses the individual’s credit and accordingly, either approves or rejects the request. Should the request gets approved, the consumer can then pay fixed monthly fees for a selected period until the purchase is completely paid off. As the pandemic pushed several brick-and-mortar retailers to temporarily shut down, online shopping surged, while the whole buy now, pay later service is having its moment.
According to Worldpay, BNPL accounted for 2.1% or about $97 billion of all global eCommerce transactions in 2020. Despite already growing in popularity prior to the pandemic, a shift in consumer spending habits and surging eCommerce adoption gave the market a push. As of June 30, 2021, Affirm has approximately 29,000 merchants integrated on its platform, ranging from small businesses and brick-and-mortar stores to large enterprises and direct-to-consumer brands operating in all sort of industries. And top retailers have been heading that way too. In August of 2021, Affirm announced that its flexible payment solution will become available to Amazon customers at checkout. Indeed, the firm is reportedly set to remain as Amazon’s exclusive BNPL partner in the U.S. right through January 2023.
After postponing its IPO in 2020, Affirm eventually went public on January 13, 2021 on the Nasdaq, raising approximately $1.2 billion. The following day, the price of its shares doubled.
Head over to Moneybase Invest to add Affirm Holdings (AFRM) to your portfolio.
Doximity Inc (DOCS)
IPO price: $26
Current price: $49.17 (as of December 21, 2021)
Return: 86.12% (as of December 21, 2021)
Market cap: $9.17 billion (as of December 21, 2021)
A so-called social media platform for medical professionals, Doximity was launched in 2010 to offer its members a range of curated medical news, telehealth tools and case collaboration. Known as the LinkedIn for doctors, the platform now boasts over 1.8 million medical professionals on its network. Much of Doximity’s revenue comes primarily from pharmaceutical companies who promote their products and services to doctors, while it also serves as a recruiting tool, giving medical recruiters a central place to find prospects.
With the onset of the COVID-19 pandemic and patients’ need for remote doctor visits, the intersection between health and technology took centre stage and investors seized the opportunity to profit from this economic shift. Yet, this novel telemedicine service is nothing new to Doximity. The company has been offering this service since 2016 when doctors could call patients using their work number on a mobile phone Then in 2019, it moved the dialer service to its main app, while in 2020, it added video and launched a paid enterprise version. When considering that telehealth is just 2% of the company’s current revenues, the potential to grow in this sector is certainly there.
Doximity’s blockbuster public debut took place on June 24 of this year, with shares opening more than 58% above their offer price, while it raised close to $500 million.
Click here to buy Doximity Inc (DOCS) stock.
Bonus: Other noteworthy, high-profile IPOs of the year
They may not have generated sweeping returns like the stocks above, however, each of the below blockbuster IPOs have been noteworthy and have been weel received.
IPO Date: April 14, 2021
Deal Size: $37.7 billion
Current Market Cap: $53.03 billion (as of December 22, 2021)
IPO Date: July 7, 2021
Deal Size: $12.2 billion
Current Market Cap: $9,61 billion (as of December 22, 2021)
IPO Date: November 10, 2021
Deal Size: $11.9 billion
Current Market Cap: $87.17 billion
Lucid Motors (LCID)
IPO Date: July 23, 2021
Deal Size: $2.1 billion
Current Market Cap: $62.59 billion
Robinhood Markets (HOOD)
IPO Date: July 29, 2021
Deal Size: $2.1 billion
Current Market Cap: $16.27 billion
Unfamiliar with IPOs but would like to find out more about investing in them? Here is a comprehensive guide about initial public offerings, how they work, their advantages and disadvantages and much more.
How to invest in top performing IPOs with Moneybase Invest
Ready to invest in these IPOs? Your first step to tapping into a world of investment opportunities with Moneybase Invest is to sign up and open an account.
To do so:
- Download the app from either Google Play or the Apple App Store. Alternatively, you may access Moneybase Invest on your desktop by visiting https://live.cctrader.com/
- Once you’ve onboarded successfully and have funded your account, head over to the search bar at the top of your screen and input either the company name or ticker symbol.
- Select the instrument of your choice from the list and then click on the Buy button on the window located at the bottom of your screen.
- On the New Order page, input the number of shares you would like to purchase and hit the Place Buy Order. The stock has been added to your portfolio.
Access over 20,000 Stocks, ETFs, Bonds & Funds and over 4,300 fractional US shares and ETFs on our award-winning platform, with no hidden fees and instant market execution.
* Source for selection of stocks and return figures - https://stockanalysis.com/ipos/2021/
Moneybase Invest is brought to you by Calamatta Cuschieri Investment Services Ltd and is licensed to conduct investment services business by the MFSA under the Investment Services Act.
Moneybase Invest offers direct market access and speed of execution and is intended for knowledgeable and experienced individuals taking their own investment decisions. The value of investments may go up and down and currency fluctuations may also affect investment performance.
The contents of this article are not intended to be taken as a personal recommendation to invest but strictly based on research and for information purposes only. Retail investors should contact their financial adviser for a suitability assessment prior to taking any investment decisions.