The IPO and SPAC market in 2020 shattered records with 480 transactions, a 106% increase from 2019. What are experts expecting in 2021 as this race to the public markets unfolds? IPOs and SPACs are projected to be at record-breaking levels the first half of 2021 and optimism for continued momentum into the second half of the year.
Specialized professional services firm, Connor Group, has a front-row seat to unfolding trends with experience working on over 130 IPOs and SPAC transactions. They work with over 1,000 companies and have never seen such enthusiasm from private companies looking to enter into the public markets.
According to Connor Group managing partner, Jim Neesen, “We are seeing companies that want to file for an IPO one to two months after engaging with us, as opposed to the typical 6-to-12-month time frame of preparation. Many of our 40 IPO clients we’re currently working with are pushing aggressively to go effective before June 2021.”
Another emerging trend is companies that wouldn’t traditionally be candidates for going public, are striving to go public fast. In today’s market, companies are taking an opportunistic dual track, willing to go public with either a traditional IPO or a SPAC. Another trend to watch is hybrid auctions, an approach most recently taken by AirBnB and DoorDash at the close of 2020.
With so much momentum and a variety of paths to go public with, why are some experts wary of what is to come in later this year? In addition to questions about the COVID economy once government stimulus slows down, some companies that have gone public via SPAC may not be ready for the public markets. Connor Group partner, Deepika Sandhu, stated, “With regards to companies rushing to go public, I often use the analogy of marriage. If you put all the focus on the wedding and fail to adequately prepare for the marriage, you are setting yourself up for a challenging road ahead.”
Despite uncertainty as to how these unusual circumstances will play out, 2021 is looking to be another noteworthy year. With unprecedented spending of $10 trillion and counting for COVID, low interest rates, and a relatively strong economy, the outlook is good. Investors, companies, and the overall ecosystem have quickly adapted to changes in the market brought about by COVID, harnessing a sense of resolve on Wall Street that we’ve never seen before.
Sandhu
Information for this article was provided by the Connor Group. For more information, visit connorgp.com.
