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Remember the wave of IPOs during the peak of the Covid-19 pandemic in 2020 and 2021? Companies like Airbnb, Coinbase, Palantir, and Rivian made impressive debuts as the stock market soared. This surge was fueled by cheap money and retail investors eager to invest their excess cash. However, as the Federal Reserve started raising interest rates to combat inflation, the IPO market slowed significantly. Despite these challenges, there are several upcoming IPOs to watch in 2024 that could reignite investor enthusiasm.
The Rise and Fall of IPO Activity
The IPO market experienced a significant boost during the pandemic, with retail investors piling into meme stocks and optimistic economic predictions driving enthusiasm. However, the momentum didn’t last. The Federal Reserve’s interest rate hikes to control inflation dampened the IPO market. According to Jose Torres, a senior economist at InteractiveBrokers, a rebound in IPOs isn’t expected until interest rates stabilize. Despite this, the upcoming IPOs to watch in 2024 could signal a revival in market activity.
Key Factors Influencing the IPO Market
Institutional investors, who play a crucial role in IPOs, remain cautious due to high interest rates and economic uncertainty. Avi Deutsch, managing director at Robertson Stephens, highlights that high costs of money and persistent inflation make investors wary. This environment has led many companies to postpone their IPO plans, waiting for more favorable conditions. However, the standoff between companies and investors is gradually easing, setting the stage for the upcoming IPOs to watch in 2024.
Sectors Leading the Upcoming IPOs to Watch
Historically, the technology sector has dominated the IPO landscape. Looking ahead, renewable energy companies are expected to be a significant source of new public offerings. This shift reflects broader market trends towards sustainability and clean energy. As investors seek to diversify their portfolios, these sectors present exciting opportunities among the upcoming IPOs to watch.
Top Recent IPOs of 2023
Before diving into the upcoming IPOs to watch, it’s helpful to review recent market activity. In 2023, several notable companies went public:
- Arm Holdings ADR (ARM): Debuted on September 18, 2023, at $51 per share. Despite an initial rise, shares have settled in the low $50s.
- Surf Air Mobility (SRFM): Launched on July 27, 2023, at $5 per share, but has since dropped to under $2.
- Better.com (BETR): Listed on August 24, 2023, at $17.44 per share, but experienced a dramatic decline shortly after.
These examples underscore the volatility of the IPO market, reinforcing the need for cautious investment in upcoming IPOs to watch.
Promising Upcoming IPOs to Watch in 2024
Several high-profile companies are expected to go public in 2024. Here’s a look at some of the most anticipated upcoming IPOs to watch:
- Stripe IPO
- Valuation: $50 billion
- Overview: This San Francisco-based payment processing giant is gearing up for one of the most anticipated upcoming IPOs to watch. Despite a reduced valuation from its 2021 peak, Stripe remains a top contender.
- Klarna IPO
- Valuation: $6.7 billion
- Overview: The Swedish buy-now-pay-later pioneer has seen a significant drop in valuation, but remains a key player among upcoming IPOs to watch due to its innovative business model.
- Chime IPO
- Valuation: $25 billion
- Overview: Chime, a no-fee mobile banking platform, postponed its IPO plans amid market volatility. It remains one of the most anticipated upcoming IPOs to watch.
- Databricks IPO
- Valuation: $43 billion
- Overview: As a leader in AI-powered data analytics, Databricks is well-positioned for a successful public debut, making it a top upcoming IPO to watch.
- Reddit IPO
- Valuation: $5.5 billion
- Overview: Despite recent challenges, Reddit’s massive user base and community-driven model make it a notable upcoming IPO to watch.
Read more: Reddit IPO: Trade Today? Here’s What You Need to Know About eToro and Beyond
- Impossible Foods IPO
- Valuation: $7 billion
- Overview: Known for its plant-based products, Impossible Foods aims to capitalize on the growing demand for sustainable food options, making it an exciting upcoming IPO to watch.
Investing in IPOs can be risky, but with the right strategy, it can also be rewarding. Here are some tips for navigating the upcoming IPOs to watch:
- Diversify Your Portfolio: Avoid putting large percentages of your investment in a single company. Spread your investments across various sectors and industries.
- Research Thoroughly: Before investing in any IPO, conduct comprehensive research. Review the company’s financials, market potential, and competitive landscape.
- Stay Informed: Keep up-to-date with market trends and economic indicators that could affect the performance of upcoming IPOs to watch.
Looking Ahead at the Upcoming IPOs to Watch
The IPO market has faced significant challenges over the past few years, but the landscape is gradually changing. As we look forward to 2024, several high-profile companies are preparing to go public, presenting exciting opportunities for investors. By staying informed and adopting a cautious investment approach, you can make the most of the upcoming IPOs to watch. Whether you’re eyeing tech giants like Stripe and Databricks or innovative companies like Impossible Foods, the IPO market in 2024 promises to be dynamic and full of potential.
