IPOs Surge to Record Level in 2020, Causing Concern for Some

January 21, 2021

In a move few would have predicted in the early days of the pandemic, investors flocked to initial public offerings are a record rate in 2020. Companies raised $167.2 billion through 454 offerings last year, according to data from Dealogic. That shatters the previous full-year record of $107.9 billion, set at the height of the dot-com boom in 1999.

Breaking a record set during the dot-com era has some worried that the market may be on a similar trajectory, which ends in a burst bubble. Analysts point to the surge of individual investors using apps like Robinhood. Historically, such investors are prone to flee the market once it starts to cool.

The IPO surge is unlikely to abate. The surge didn’t being in earnest until later in the year, with $67.3 billion raised in the fourth quarter, more than six times the offerings made during the first quarter. With big names like Instacart and Robinhood itself making IPOs this year, some analysts expect 2021 to potentially break last year’s record.

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