[Asia Economy Reporter Byunghee Park] This year, the global initial public offering (IPO) market is experiencing the largest boom in history, surpassing the dot-com bubble era of 2000.
According to financial information firm Dealogic, 875 IPOs raising over $1 million were completed by April this year. This is the highest number since Dealogic began compiling related statistics 26 years ago. It far exceeded the previous record of 592 IPOs by April 2000.
The total amount raised through IPOs this year also reached $230 billion, four times the $80 billion recorded in 2000. The $230 billion exceeds the total annual IPO amount in 21 out of the past 26 years since Dealogic started compiling these statistics. Even if there are no additional IPOs for the rest of the year, this year's IPO volume already ranks sixth all-time.
The hot investment enthusiasm for SPACs (Special Purpose Acquisition Companies) this year, along with major global stock markets such as New York reaching all-time highs, has driven the IPO market boom.
About half of the $230 billion was raised through SPACs. By region, two-thirds of the $230 billion was raised in the United States, where SPAC investment enthusiasm was particularly strong. Following the U.S., China and Hong Kong ranked second and third with market shares of 8% and 5%, respectively.
Coupang raised $4.6 billion by listing on the New York Stock Exchange, while Chinese video-sharing application Kuaishou raised $6.2 billion through its Hong Kong stock market listing. The UK delivery app Deliveroo also raised $2 billion on the London Stock Exchange.
The IPO market is expected to remain strong for the rest of the year. Expectations are growing that the global economy will recover as lockdown measures are lifted in countries such as the U.S., the UK, and Israel. Companies preparing for IPOs include Endeavor, the parent company of UFC; Honest, co-founded by actress Jessica Alba; and Robinhood, a stock trading application.
However, the recent sharp contraction in the SPAC market is likely to be an obstacle. After the U.S. Securities and Exchange Commission (SEC) announced increased scrutiny of SPACs, IPOs via SPACs have sharply declined.
Dealogic did not include direct listings in this tally. Therefore, cryptocurrency exchange CoinDesk, which was listed on the Nasdaq earlier this month, was excluded from the count.
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