Friday, May 27

The US IPO market had its busiest quarter in over 20 years-and newly public stocks are roaring back after a downturn in May

The second quarter of 2021 was the busiest quarter for initial public offerings since 2000, with 113 IPOs raising $39.9 billion, data from Renaissance Capital reveals.

Additionally, newly public stocks are roaring back as deal activity heats up. After a steep drop off in May, the Renaissance IPO Index rebounded to finish the quarter up 4%, lagging slightly behind the S&P 500. The index is now up roughly 2.5% year-to-date, compared to the S&P 500’s 14% rise.

IPOs produced a 34% average return in the second quarter, compared to 13.5% in the first quarter.

But while the traditional US IPO market is booming, the SPAC bubble is continuing to deflate. Only 50 blank-check companies debuted in the second quarter, raising $9.3 billion, a decline of 89% from the prior quarter. Renaissance cites a combination of poor returns and SEC roadblocks for the decline.

Rallying IPO returns and a growing pipeline of new listings could indicate a “booming third quarter” for the IPO market, Renaissance added. Whether the market can top the second quarter in terms of deal amounts and money raised remains to be seen, though this week is already set to see a whopping 17 companies list on US exchanges.

Chinese ride-hailing company Didi is expected to raise $3.9 billion in the largest IPO this week. Krispy Kreme plans to begin trading Thursday.

IPO chart