2019 has already seen a slew of impressive tech companies go public, but traders will be watching closely over the next two quarters, as another round of heavyweight tech company IPOs are expected.
"It really was a fascinating and impressive quarter. When you think back at the first half of 2019, it was the busiest first half since 2007," Jose Cobos, the New York Stock Exchange's head of technology capital markets, told Cheddar. "We had a tremendous number of IPOs."
"That's even more impressive when you think about the fact that January and February, for the most part, the market was closed as result of the SEC and government shutdown."
The New York Stock Exchange reports that it raised about 75 percent of all tech IPO proceeds in the U.S. during the first two quarters, a share equivalent to just over $12 billion. Eleven tech companies have gone public on NYSE so far this year, including household names like Uber ($UBER) and Fiverr ($FVRR), as well as lesser-discussed firms like the security policy management company Tufin Software Technologies ($TUFN) and the Nigerian shopping platform Jumia Technologies ($JMIA).
It's expected that Peloton, Postmates, and Airbnb will follow suit later this year.
"[In] September, October, November, I think we'll continue to see a fairly large number of companies go out," he said, adding that 2018 was ultimately the highest performing year for tech companies, in terms of listings and proceeds raised, since 2014.
Meanwhile, in recent years, only two companies have pursued direct listings: Spotify ($SPOT) and Slack ($WORK). He said more companies could list shares, but that "it's not necessarily the right method for all companies."
Unlike public offerings, direct listings don't involve the creation of new shares.
Companies usually go public, Cobos explained, because executives hope to raise more capital to grow the business, to provide liquidity to investors, and to expand their company's public profile.
After the 2021 boom, IPO activity slowed down significantly, in part due to monetary policy – but things are getting moving again with tech-friendly companies like Iboutta and Rubrik making a public debut.
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