2018 was a significant year in the financial world, marked by a surge of initial public offerings (IPOs). The buzzing excitement around IPOs is hardly a new phenomenon; they present a golden opportunity for companies to raise capital by offering shares to the public for the first time. For investors, IPOs offer the allure of getting in on the ground floor of a potentially skyrocketing stock. This article presents a detailed exploration into the companies that made their mark in 2018 with their IPOs.
The Appeal of 2018
First, let’s set the stage by understanding the broader context. The U.S. stock market saw robust growth in 2018, which emboldened many companies to go public. The tech industry, in particular, took center stage, but other sectors also made their presence felt.
Noteworthy IPOs of 2018: A Deep Dive
1. Dropbox:
Sector: Technology
Summary: Dropbox, the cloud storage giant, entered the stock market with a bang in March. The IPO was priced at $21 per share, valuing the company at about $8.2 billion.
2. Spotify:
Sector: Music and Entertainment
Summary: Opting for a direct listing instead of the conventional IPO, Spotify made a significant splash in April. This allowed existing shareholders to sell their stocks directly to the public.
3. DocuSign:
Sector: Technology
Summary: Specializing in electronic agreements, DocuSign went public in April. Their stock surged by over 30% on the first day of trading.
4. Elanco:
Sector: Pharmaceutical
Summary: Elanco, an animal health business spun off from Eli Lilly, had a successful IPO in September, raising over $1.5 billion.
5. Eventbrite:
Sector: Event Management
Summary: This global ticketing and event tech platform saw its shares jump by nearly 60% during its September IPO.
6. Farfetch:
Sector: E-commerce
Summary: Luxury online fashion retailer Farfetch debuted in September, witnessing its shares soar by over 40% on its first trading day.
7. Moderna:
Sector: Biotechnology
Summary: In December, Moderna made headlines with the largest biotech IPO ever, raising a staggering $604.3 million.
These are just a few highlights, and many other companies enjoyed their public debuts throughout the year.
Factors Behind Successful IPOs in 2018
Several pivotal factors contributed to the wave of IPOs in 2018:
- Strong Economic Indicators: A robust economy often emboldens companies to go public, hoping for better valuations.
- Tech Industry Surge: With tech playing an increasingly dominant role in our lives, tech startups are always eyed keenly by investors.
- Diverse Portfolio: Unlike some years dominated by a single sector, 2018 saw a range of industries choosing to go public, diversifying options for investors.
Lessons from 2018’s IPOs
Every IPO offers lessons – both for companies planning their public entry and for investors. Some of the insights from 2018’s IPO saga include:
- The significance of company fundamentals: Regardless of market conditions, companies with solid fundamentals, clear profit models, and a robust vision tend to fare better.
- Timing matters, but it’s not everything: While a buoyant market can boost an IPO, the core business model and growth prospects remain pivotal.
- Diversity is the spice of the stock market: A diverse range of companies going public means a more vibrant market and better choices for investors.
FAQs
Q1: Why was there a surge in tech IPOs in 2018?
Answer: The tech sector’s growth, combined with investor interest in digital innovations, largely contributed to the tech IPO surge.
Q2: What’s the difference between a direct listing and a traditional IPO?
Answer: A direct listing allows companies to bypass underwriters, enabling existing shareholders to sell their shares directly to the public.
Q3: How do economic conditions affect IPOs?
Answer: Economic conditions, like a booming economy or a bear market, can influence a company’s decision to go public and its IPO valuation.
Conclusion
2018 was undeniably a landmark year for IPOs, with a gamut of companies across sectors choosing to make their public debut. This exploration into the companies that went public offers not just a retrospective view but also insights and lessons for future IPOs and market strategies. In the ever-evolving financial landscape, understanding past patterns prepares us for future successes.
