Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 77% of retail investor accounts lose money when spread betting and/or trading CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money

77% of retail investor accounts lose money when spread betting and/or trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

  • IPO watch
  • disruptive innovation

How are market conditions for IPOs?

At the end of September, investment software firm Allvue Systems pulled the plug on its IPO.

The group, backed by private equity firm Vista Equity Partners, was set to raise as much as $291m. However, it delayed the move due to “adverse market conditions”.

Allvue added that it would reconsider the timing for another attempt in the future.

It was joined in its disappointment by Ifit Health and Fitness, which produces connected fitness software and pulled a potential $7bn IPO earlier this month.

The group, in a very similar statement to Allvue, said that the decision was based on adverse market conditions and that it would continue to evaluate the timing for a proposed future offering.

However, other companies are still ploughing on with their IPOs or announcing their intentions to list.


Ready to float

Rent the Runway falls into the latter group. It had confidentially filed for a Nasdaq IPO in July but only confirmed this month. The online clothing rental group is hoping that, as the US and elsewhere continue to lift social restrictions post-coronavirus pandemic, people will shake off their couch pyjamas and once again return to weddings and parties en masse, wanting to look their best.

The offering is worth around $100m.

Discord provides app-based services for video calls, text chat and instant messaging, with a particular focus on the gamer market. It is expected to hold an IPO in the autumn with an estimated valuation of more than $10bn.

Autonomous vehicle group Rivian registered confidentially with the US Securities and Exchange Commission back in August and is believed to be looking at a listing later this month or in November. It is reportedly looking to raise between $5bn to $8bn, giving it an $80bn valuation.


A global trend

IPOs are also gaining ground in London, with investment trust Pantheon Infrastructure set to float and raise £300m. It will look to invest in sectors such as digital infrastructure, renewables and energy efficiency.

According to Reuters, European stock market listings have come back with a bang as well, with 42 IPOs raising $8.5bn this quarter — the highest amount for 10 years.

As reported by ValueWalk, figures from GlobalData said there were 791 IPO listings registered with an aggregate deal value of $212.5bn in the first seven months of 2021 on US stock exchanges. That is up from 188 listings, with a deal value of $63.7bn, in the same period in 2020.

Parth Vala, company profiles analyst at GlobalData, told ValueWalk: The main contributing factors of this frenzy are: the low-interest rate environment, which is drawing greater participation of first-time investors.”



Aggregate value of the 791 IPO listings registered on US stock exchanges in the first 7 months of 2021



Second time lucky

The market has seen some IPO revivals, such as Genworth Financial [GNW] spinning out its mortgage insurance business Enact Holdings [ACT]. The IPO was cancelled back in May, because of volatility, the company had said. It successfully floated back in September.

Ant Groups $34.5bn dual-listing IPO, which was pulled last November following Chinese government pressure on the tech sector, may be another phoenix rising from the flames, although its fortunes oscillate with Beijing’s calls.


“We not only see new deals coming to the market; we see existing engagements continuing to move forward" - Mark Jaffe, Managing Partner, Latham and Watkins



There seems to be little rhyme or reason when it comes to why some firms are hesitant about listing in present conditions while others are prepared to keep going forward.

There are wider concerns around rising energy prices hitting consumer spending, and a possible resurgence of COVID-19 if new variants hit and inflation-fuelled market volatility.

Yet there seems to be enough confidence out there to keep the listings coming.

“We not only see new deals coming to the market; we see existing engagements continuing to move forward,” Marc Jaffe, managing partner of law firm Latham and Watkins’ New York office, told Reuters. The 2022 pipeline looks strong, said Jaffe.

According to Dealogic, as reported by Reuters, shares of US companies that went public in the past four weeks have gone up 25.5% on average, compared with a 42% rise in value for those that went public this time about four months ago.

Listing could still make sense in these volatile times

Disclaimer Past performance is not a reliable indicator of future results.

CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.

The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although we are not specifically prevented from dealing before providing this material, we do not seek to take advantage of the material prior to its dissemination.

CMC Markets does not endorse or offer opinion on the trading strategies used by the author. Their trading strategies do not guarantee any return and CMC Markets shall not be held responsible for any loss that you may incur, either directly or indirectly, arising from any investment based on any information contained herein.

*Tax treatment depends on individual circumstances and can change or may differ in a jurisdiction other than the UK.

Continue reading for FREE

  • Includes free newsletter updates, unsubscribe anytime. Privacy policy

Latest articles