09 January 2019

2018 IPO roundup

The stock market saw numerous highly-anticipated and some long-awaited initial public offerings (IPOs) in 2018, not least by the likes of Dropbox and Siemens Healthineers, and of course not forgetting the surprisingly unconventional listing of Spotify. Against this background though, Zephyr, the M&A database published by Bureau van Dijk, shows 2018 was by no means a banner year as only 2,504 IPOs were announced over the 12 months and together they collectively raised USD 201,205 million, compared with 3,897 totalling USD 223,985 million in 2017.

That is not to say all was doom and gloom, far from it, as 33 IPOs either completed or were announced in 2018 that had a value of USD 1,000 million or more, the largest of which completed in December and saw Softbank’s wireless arm raising USD 21,286 million from debuting in Tokyo. It was the sixth-largest-ever globally, and Japan’s biggest on record, but the company suffered a 15 per cent slump in its share price on its first day of trading. Conversely, Siemens Healthineers rocketed out of the starting blocks in March to become Germany’s sixth-largest listing ever at USD 5,169 million and the group’s stocks are currently trading 28 per cent higher than the IPO price.

So-called unicorns, particularly technology ones, took flight in 2018 and front and centre of the stampede is Xiomi, the Beijing-headquartered smartphone manufacturer that went public in July after raising USD 4,720 million in Hong Kong, which represents the fourth-largest IPO globally that was announced in 2018. Next up is Meituan Dianping, which accounts for the sixth-largest listing of 2018 after its September debut, also in Hong Kong, fetched USD 4,224 million. Obviously, investors were not put off by financials showing the group buying website operator rocked losses of USD 18,990 million (USD 2,920 million) in fiscal 2017, especially as the red ink was offset by annual transaction volume and revenue hitting CNY 357,000 billion and CNY 33,930 billion, respectively. Chinese companies took advantage of establishing offshore vehicles to carry out their plans, including Pinduoduo, which had a pre-IPO valuation of almost USD 15,000 million before gaining admission to Nasdaq in July under the name Walnut Street.

Highly-anticipated debuts valued at under USD 1,000 million included that of DocuSign; the Californian e-signature and digital transaction management company kept its own IPO on Nasdaq in April to a relatively modest USD 629 million, as did fellow enterprise software listing hopeful Dropbox, which went public in March after raising USD 756 million.

While completed listings by the likes of Airbnb, Lyft and Uber failed to materialise in 2018, investors will surely not be disappointed as paperwork has been filed and speculation is mounting that other unicorns, such as Pinterest, are also gearing up to go public meaning that 2019 is already being touted as a potential year of the decacorn. 

© Zephyr