Record IPO frenzy will continue through October, NYSE president says
- The New York Stock Exchange saw record IPO activity this month, and president Stacey Cunningham expects the offering spree to charge forward.
- "October is on track to look exactly the same" as the offering-heavy September, she said in a Wednesday interview with Bloomberg TV.
- Companies are also tapping the market in increasingly diverse ways. Palantir and Asana began trading publicly on Wednesday after completing direct listings, which allow shares to hit the market without a company issuing new stock.
- Special-purpose acquisition companies offer another avenue to public trading. The blank-check firms raise cash in IPOs with the intention of merging with a private company and making the combined entity public.
- In all, at least 159 companies have gone public in the third quarter of 2020, according to Bloomberg data. Just 62 debuts took place in the same period last year.
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The New York Stock Exchange is closing out a record month for initial public offerings. The exchange's president expects the hot streak to extend through the fall.
Wednesday saw the exchange host two IPOs, two direct listings, and two special-purpose acquisition company, or SPAC, listings, according to Stacey Cunningham, president of NYSE. The flurry of market debuts signals a rebound in funding markets' health, and the president expects the bounce-back to drive similar activity next month.
"September has been the busiest month of the New York Stock Exchange for IPOs in our history, and October is on track to look exactly the same," Cunningham said in a Wednesday interview with Bloomberg TV.
The rosy outlook comes as companies tap alternative methods for entering the market. Palantir and Asana both began trading on Wednesday after the firms completed direct listings, which involve companies going public without issuing new shares. Shares of both companies rocketed higher in the afternoon.
Other firms are making their public trading debuts through SPAC offerings. The so-called blank-check companies raise cash in IPOs with the intention of merging with a private company. Once the two businesses combine, the single entity's shares start trading in the public market.
The number of SPAC mergers in 2020 has nearly doubled from the year prior, according to SPACInsider.com. Nearly $44 billion has been raised through such deals in the year-to-date compared to the $13.6 billion raised by SPACs in 2019.
The wider range of public-market avenues creates new opportunities for cash-strapped companies to bolster their balance sheets. Firms are taking advantage of the openings, too. At least 159 companies have gone public in the third quarter, according to Bloomberg data, compared to the 62 debuts seen in the same period last year.
"We're seeing a lot of companies looking to tap the public markets as their uncertain about what the future might bring based on the pandemic, based on economic conditions," Cunningham said.
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