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IPO companies outlook 2022
The 2021 IPO market was impressive – it surpassed the previous record set during the dot-com boom in terms of listings and capital raised. But, the past two years have also been defined by market disruption, and this is unlikely to come to an end at the stroke of midnight on December 31. As economic uncertainty remains, with the rise of cases and the new omicron variant, we could see more hesitancy in the IPO market.
We’re still seeing huge numbers of SPAC listings in the US, a trend which could well continue through 2022, although this method remains more prevalent in the US market than in Europe or Asia.
Particularly in Europe, we’ve seen several companies that were expected to list in 2021 put their plans on hold until the new year and beyond due to market volatility, rising inflation, tightening monetary policy and supply chain disruptions. Notable examples include eToro and BrewDog, as well as US listings such as Instacart and TikTok.
The electric vehicle sector is expected to be one to watch in 2022, with the Bank of America predicting we could see the industry raise a total of $100 billion from IPOs by 2023. In fact, the drive toward net-zero carbon and new technologies could push a number of sustainability stocks as well as AI and cybersecurity firms into public markets.
With so many upcoming IPOs to choose from, the expectation will be on companies to deliver stronger earnings and give investors better IPO preparation in order to succeed. We’ve seen a lot of companies throughout 2021 adjusting their guidance and listing with lower prices, so hopefully listing companies will be more prepared going into the new year.
Upcoming IPOs list 2022
Not many companies have officially confirmed their IPOs yet, but here are ten of the biggest future IPOs and SPACs we’re expecting to see in 2022.
- MSP Recovery
Other notable mentions for upcoming listings include Bullish and Fertitta Entertainment – both of whom are expected to go public via SPAC deals in 2022. BrewDog was also expected to list, but it has said that now won’t be until 2023 due to the unfavourable market conditions.
To see coverage of these, and more future IPOs, visit our IPO trading page.
Online payments giant Stripe is expected to go public in the next year, with some reports predicting a post-listing valuation of around $100 billion. While Stripe hasn’t officially filed its IPO documents, it is reportedly in talks with investment banks already.
Gen-Z favourite TikTok will likely be going public at some point in 2022, although there are no concrete details yet. Parent company ByteDance is still facing regulatory issues but once those are resolved we could see one of the most popular IPOs in history. On its own, TikTok is worth over $50 billion, but ByteDance is estimated to be valued at nearly $250 billion.
Read our guide to TikTok’s IPO
Grocery delivery service Instacart has yet to file its documents with the SEC but we’re already seeing massive investor interest in its IPO. From its current valuations, the company is expected to achieve a post-listing valuation of $40 billion.
Learn more about Instacart’s IPO
MSP Recovery is set to go public via a SPAC deal that values it at a colossal $32.6 billion – which will make it one of the largest SPACs on record. The healthcare litigation business is merging with Lionheart Acquisition Corp. The deal was expected to be finalised in Q4 2021 but, like a lot of listings, it was delayed.
Learn more about MSP Recovery’s SPAC
Software company Databricks is expected to list and will likely be a popular IPO stock when it does. It’s yet to file or even publicly confirm that it’s going public, but a recent growth spurt makes it likely. Databrick’s current valuation puts its post-listing market cap at about $40 billion.
See our guide to Databrick’s IPO
Neobank contender Chime is expected to go public at some point in 2022, although it has not publicly filed documentation. Chime is worth some $25 billion as of its latest fundraising round but is predicted to achieve a post-listing valuation of $30 billion.
Learn more about Chime’s IPO
Polestar is going public via a SPAC deal in the first half of 2022. The agreement was announced with blank cheque firm Gores Guggenheim in September this year and will close once shareholders have approved it. It’s expected to trade under the ticker ‘PSNY’ and will be worth approximately $20 billion.
Find out everything we know about Polestar’s upcoming SPAC
The thorn in Wall Street’s side this year, online discussion forum Reddit is expected to go public early in 2022. The company has been vocal about waiting for the right market conditions so that could change. Speculation for the listing has been rife for about a year due to the platform’s growing popularity. Reddit is expected to list for approximately $15 billion.
Online stockbroker eToro was expected to go public via a SPAC deal in Q4 2021 but we’re expecting to see it in early 2022 instead. The original plan had the SPAC booked in for Q3, but the huge number of SPAC deals caused a regulatory backlog. The deal with FinTech Acquisition Corp has valued the firm at $10.4 billion.
Learn more about eToro’s SPAC deal
Another company that was predicted to list in 2021, we’re now expecting Discord to go public in the next 12 months instead. Discord had received a number of acquisition requests in 2021, most notably from Microsoft, but all of them fell through so the company will be going public on its own. The online communications developer is thought to be worth over $15 billion.
How to trade IPOs with City Index
Once an IPO stock has been listed, you’ll be able to trade its shares as you would any other publicly-traded company.
Follow these steps to get started trading shares:
- Open a City Index account,or log inif you’re already a customer
- Search for the company you want to trade in our award-winning platform
- Choose your position and size, and your stop and limit levels
- Place the trade
It’s important to remember that while new companies offer great growth potential, they also come with a significant amount of risk. To build your confidence trading shares, we recommend you practise taking a position first in a risk-free demo account.
How have 2021 IPOs performed?
The IPO market in 2021 was active, to say the least. As of Q3, 1635 companies had listed globally, raising a combined $330.7 billion, according to research by EY. That’s already 35% ($115bn) higher than the full year 2020, despite activity falling for two consecutive quarters in 2021.
The US equity market continued to be the largest, with 403 IPOs raising over $133 billion, which surpasses the country’s 20-year records for count and proceeds. The Asian market raised $106 billion and the European region raised $74 bn.
Despite being smaller than the US market, the number of UK listings has jumped a whopping 310% this year, with 113 listings compared to just 36 last year. The largest UK IPOs were the £8bn listing of fintech firm Wise and the £1.7bn float of cybersecurity company Darktrace.
Following on from 2020, SPAC deals continued to gain traction in Q1 2021 with over $88 billion raised, making it the largest quarter on record. The market cooled down for the remainder of the year, but we’re still seeing huge swaths of acquisition-based companies listing on exchanges in the US. According to PWC, 30% ($16.8bn) of the America’s IPO proceeds were attributable to SPACs.
Tech, healthcare and industrials received the most attention in terms of sectors. The interest in healthcare stocks is unsurprising given the hold the Covid-19 pandemic still has, and the continued interest investors have in vaccine-related stocks.
It is worth noting that IPO valuations have been questioned across the board. Research from Deaologic showed that 49% of the companies that raised over $1 billion at IPO are now trading below their listing price – including the likes of Deliveroo and Oatly. This is compared to just 33% of companies in 2019 and 27% in 2020.
Top IPO stocks of 2021
Here are the top ten IPOs, direct listings and SPACs of 2021 (listed by each company’s market capitalisation at market open on its first trading day).
- Rivian (IPO, $86 billion)
- Coinbase (Direct listing, $85.8 billion)
- Coupang (IPO, $84 billion)
- Didi Global (IPO, $67.8 billion)
- Roblox (Direct listing, $41 billion)
- UiPath (IPO, $35.8 billion)
- Toast (IPO, $31 billion)
- Robinhood (IPO, $29 billion)
- Lucid Group (SPAC, $24 billion)
- AppLovin (IPO, $23.3 billion)
- IPO date: November 10, 2021
- IPO price: $78
- Initial market cap: $86 billion
Rivian shares were listed at $78 each, raising $12 billion in equity and giving the company a valuation of $66.5 billion. However, shares began trading on the Nasdaq at $106.75 and closed on the first day at $100.73. This gave Rivian a market capitalisation of approximately $86 billion – making it bigger than both Ford and General Motors.
As it’s such a newly-listed firm, there’s currently no consensus from analysts on how the shares will perform going into 2022. But the buzz around electric vehicle (EV) stocks in general makes it an interesting one to watch. Other EV companies are set to follow in its tracks throughout 2022.
- IPO date: April 14, 2021
- IPO price: $250
- Initial market cap: $85.8 billion
Coinbase was set a reference price of $250 per share by Nasdaq, which would give it a valuation of $65 billion, but at open this price shot up to $380 as investors clamoured to get a piece of the cryptocurrency exchange. At the end of the first day, shares of Coinbase closed at $328.28, giving an initial market cap of $85.8 billion.
Going into 2022, COIN has a consensus rating of ‘buy’ with an average price target consensus of $408.701 – which is 63% above its IPO price.
- IPO date: March 11, 2021
- IPO price: $35
- Initial market cap: $84 billion
Shares of Coupang increased by 81% on market open, from an offer price of $35 each to $63.50 a share. For a brief time, the company had a valuation of over $100 billion but settled down to close at $49.25 per share giving it an initial market cap of $84 billion.
Going into 2022, Coupang has a consensus rating of ‘buy’, with an average price target consensus of $36.301 – which is 3% above its IPO price.
- IPO date: June 30, 2021
- IPO price: $14
- Initial market cap: $67.8 billion
Ride-hailing service Didi offered its shares at $14 each, which would’ve given it a total market cap of more than $67 billion. At the end of its first trading day, Didi shares closed at $14.14, giving it a market cap of about $67.8 billion – just above the company’s initial offer. The company was the first rideshare giant to end the day above its offering price and also took the record for the largest US IPO from a Chinese firm since Alibaba’s IPO.
Didi’s decision to list in New York was unpopular in Beijing. Chinese regulators had asked that the company ensure its data was safe prior to the IPO, and, in an unprecedented move, requested that Didi delists its shares from the US bourse.
This means that going into 2022, the future of Didi shares remains fairly unpredictable. Reuters reports just a single analyst recommendation of ‘buy’ with a target of $251 – which is 78% above its IPO price.
- IPO date: March 11, 2021
- IPO price: $45
- Initial market cap: $41 billion
Online gaming company Roblox suggested a price point of $45 per share for its direct listing, which would’ve given it a market cap of $30 billion. But when it listed on the New York Stock Exchange its shares shot up by 54.4%, closing at $69.50 each to give the company an initial valuation of over $41 billion – more than twice the size of its competitor Epic Games.
Going into 2022, Roblox has a consensus rating of ‘buy’, with an average price target consensus of $114.40 – which is 154.2% above its IPO price.
- IPO date: April 21, 2021
- IPO price: $56
- Initial market cap: $35.8 billion
Robotics company UiPath raised $1.5 billion through its IPO in which it sold shares at $56 apiece, which was above its expected price range of $52 to $54. By market close, shares were trading at $69 each, valuing the company at $35.8 billion. The debut was one of the largest US software IPOs in history, behind Snowflake and Qualtrics in 2020.
Going into 2022, UiPath has a consensus rating of ‘hold’, with an average price target consensus of $71.14 – which is 58% above its IPO price.
- IPO date: July 29, 2021
- IPO price: $38
- Initial market cap: $29 billion
Robinhood offered 55 million shares of its class-A common stock, starting at $38 each, and raised $2.1 billion. The listing valued the company at $31.7 billion, which was below forecasts. By close, its shares had fallen by 8.4% and it ended its first day of trading at $34.82 with a $29 billion market valuation.
The price has since recovered but it marked one of the worst stock market debuts for a company of its size. Going into 2022, Robinhood has a consensus rating of ‘hold’, with an average price target consensus of $45.86 – which is 20.7% above its IPO price.
- IPO date: Sept. 22, 2021
- IPO price: $40
- Initial market cap: $31 billion
Toast’s listing came after a rocky year for the restaurant company – it had to furlough half its staff amid Covid and the general fall out the pandemic caused for the hospitality industry. It was therefore a pleasant surprise to see the company’s stock surge on its first trading day.
The company priced its shares at $40 each, which was already above its estimated range, and saw a 56% uptick to close at $63.51. This boosted Toast’s market value from the predicted $20 billion to a $31 billion market cap.
Toast shares have since had a turbulent time, but it still has a consensus rating of ‘buy’. It’s got an average price target consensus of $63.22 – that’s 0.4% below its IPO price.
- SPAC date: July 26, 2021
- SPAC price: $15
- Equity value: $24 billion
Lucid’s SPAC deal valued it at $24 billion and generated the company $4.4 billion in cash. It was one of the most anticipated SPACs of the year, with shares of Churchill Capital IV Corp – the blank cheque firm – rising from $10 each to $15 at the time of the deal. After the electric vehicle company completed its merger, shares of Lucid increased by 11% to close at $26.83.
Lucid has a consensus rating of ‘buy’ with an average price target consensus of $44.33 as we head into 2022 – that’s 195.5% above its IPO price.
- IPO date: April 15, 2021
- IPO price: $80
- Initial market cap: $23.3 billion
IPO investors valued mobile gaming company AppLovin at $28 billion, but at market open its shares started trading at $70 – 10% lower than the offer price. APP shares closed down by 18.5% at $65.20, giving it an initial market cap of around $23.3 billion. Shares of AppLovin didn’t reach the $80 mark until June.
AppLovin has a consensus rating of ‘buy’ going into the new year, with an average price target of $110.40 – which is 38% above its IPO price.
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1All consensus ratings and price targets were collected from Reuters on November 29 2021.
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