- 102 companies went public in the first three months of 2021 in the busiest quarter for IPOs in over 20 years.
- But an index that tracks newly public companies is underperforming the S&P 500 for the quarter.
- While some major IPOs like Bumble and Coupang have soared in price, other companies have disappointed.
- Sign up here for our daily newsletter, 10 Things Before the Opening Bell>$4.
The first quarter of 2021 was the busiest quarter for initial public offerings in the US in over 20 years, according to a report from
But as excitement around IPO activity has gained, the performance of the newly public companies has lagged. The Renaissance
In addition, IPOs in the first quarter averaged a 32% first-day "pop," but saw excitement fade after the close of the first day of trading. On average, companies that have gone public in the quarter have lost 14% from their first-day closes.
That performance is significantly weaker than the previous quarter. Companies that went public during the fourth quarter of 2020 averaged a 37% first-day pop, and then gained an average 28.2% for the rest of the quarter.
A number of companies with high-profile IPOs have lowered their own expectations, prompting some investors to question whether this market has overheated in the last year.
On Wednesday, Compass>$4 slashed its IPO price range and cut its expected valuation from $10 billion to $7 billion. In London, Amazon-backed Deliveroo priced its shares at the bottom of its range on Tuesday, and then tumbled 30% during its first day of trading>$4.
Others have got a warm reception from investors, like dating-app $4, which was one of the best performing US IPOs in the first quarter. According to Renaissance, it's gained 45.8% since its IPO. It was the second-largest deal behind South Korea's Coupang, which listed in New York, and has returned 25.1% since going public.
However, Renaissance shows out of the 10 largest US IPOs from the quarter, three of them have seen negative returns since their public debut: $4, $4 and $4.