A wave of high profile IPOs make their debuts in the next 9 days, and they are likely to attract major interest from investors even though many of them are losing money, including Uber Technologies Inc. Investors are bracing for 16 IPOs between today and May 10, including the global ride hailing leader’s widely anticipated offering seeking a valuation of up to $90 billion, thought to be the biggest of 2019, per IHS Markit data cited by Business Insider. BI says the current environment marks one of the most active periods in history for IPOs, which have performed well this year -- with Lyft Inc. (LYFT) as the big exception. Shares of Uber competitor Lyft have fallen badly since going public.
9 Largest IPOs In Next 9 Days
(Amount of funds to be raised)
- Uber Technologies; $8.5 billion
- Parsons Technology $500 million
- SciPlay: $330 million
- HeadHunter Group; $200 million
- So-Young International; $166 million
- Mayville Engineering; $125 million
- Yunji; $162 million
- TransMedics Group; $75 million (tied for 9th)
- Milestone Pharmaceuticals; $75 million (tied for 9th)
$10 Billion Raised Next Week
In the coming week, IPOs are expected to raise as much as $10 billion in equity capital, marking the seventh time IPOs have raised that much money in 18 years. Forthcoming IPOs include vegan tech startup Beyond Meat, Chinese tech firms So-Young International and Yunji, transplant organ care tech firm TransMedics Group, Canadian pharma company Milestone, sales services provider Parsons Technology, cancer treatment company NextCuren and Alzheimer’s treatment firm Cortexyme. While many have yet to turn a profit, investors clearly are focusing on other metrics, highlighted by mega-unicorn Uber which is expected to lose billions in the short-term.
Plant-based company Beyond Meat priced its IPO at the high end of its already lifted price range at $25 per share. Shares skyrocketed on Thursday, the stock's first day of trading. Many investors see a rapid shift away from meat and towards vegan and vegetarian diets. CEO and founder Ethan Brown cites environmental and health concerns as main reasons beyond the consumer trend, per the company's prospectus.
Beyond Meat has recreated the molecular structure of meat with amino acids, lipids, minerals and other vitamins extracted from plants for its various products including its burger, which made up 70% of total sales nearing $90 million in 2018. Beyond Meat though, still suffered net losses of $30 million last year, equal to about 30% of sales.
Uber Proves Short-Termism Dead
The excitement around Uber’s IPO demonstrates just how willing investors are to overlook major losses at newly public companies. Uber says it lost at least $1 billion in the first quarter of 2019, per the Wall Street Journal. “Despite everything written about short-termism, we’re seeing that as long as these companies have a compelling growth story, investors are actually telling them to not focus on short-term performance,” said Jay Ritter, an IPO expert.
While skeptics see weak fundamentals in many of these soon to be public companies, the bulls envision massive, fast-growing markets fueled by new technologies. For example, Uber ride hailing bulls see a $1.2 trillion market opportunity, while Beyond Meat bulls see a $3 billion market within five years for plant-based food products.