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Potential IPOs to watch

Published on: 24/02/2022 | Modified on: 23/07/2024

An initial public offering (IPO) is a common process used by a private company that is seeking to go public through a stock market listing, by selling shares to institutions and individual investors.

Upcoming IPOs can benefit private investors, as many IPO companies will include share premiums for their existing investors, which can result in potential profits. Existing shareholders of a private company could include family, friends, and professional investors, such as venture capitalists. These private equity investors help to finance companies with high growth potential in exchange for a stake in their equity.

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Upcoming UK IPOs

  • BrewDog IPO: Craft-beer brewer BrewDog is a British company that has repeated its plans for an IPO on the London Stock Exchange at some point in 2024. The company previously announced its plans in 2018 but has been waiting for the right time to debut its shares to the public, which could be complicated by the recent departure of CEO James Watt.

  • Revolut IPO: Digital finance app Revolut is touted as the UK’s biggest fintech company, with reports suggesting the company is targeting a valuation of over $40bn, having been valued at $33bn during a 2021 fundraising round. After making a record annual profit for 2023 and taking steps to bring its financial process in line with publicly-listed companies, Revolut’s IPO looks to be more a case of when, rather than if.

  • Monzo IPO: British online bank Monzo may join the fleet of UK fintech companies to debut on the stock market in 2024. The unicorn start-up was valued at $5bn after a fundraising round in March 2024.

  • Starling Bank IPO: British digital challenger bank Starling has grown its customer base to more than 3.6m. It even became profitable during the Covid-19 pandemic, and the company shows no signs of slowing down as digital banking continues to grow. It could debut on the LSE in 2024.

Upcoming US IPOs

  • Databricks IPO: Software start-up Databricks is an artificial intelligence (AI) powered data company. It reached a valuation of $43bn after multiple rounds of financing in 2023.

  • Discord IPO: Discord, valued at around $15bn in 2023, runs an instant messaging platform and app where users can interact over voice, video and text, boasting an audience of over 150 million monthly active users.

  • Houzz IPO: American home design website and community Houzz's IPO is eagerly awaited by investors, and there is speculation that the company could choose either an IPO or special purpose acquisition company (SPAC) route at some point in 2024.

  • Kraken IPO: American cryptocurrency exchange Kraken may debut its shares on the stock market in 2024, with the company currently seeking to raise more than $100m in a pre-IPO funding round.

  • Skims IPO: Founded in 2019, Kim Kardashian’s shapewear brand secured a $270m funding round that valued it at $4bn, and is reportedly exploring an IPO for some time in 2024.

  • Starlink IPO: Elon Musk's satellite constellation is due to IPO as a spin-off from parent company SpaceX, although it’s unknown when the company plans to do this, as Musk is looking for "more predictable cash flows" first. The company is reportedly preparing a tender offer that would value it at $210bn, which would make Starlink the most valuable privately-held US company.

  • Stripe IPO: Digital payments provider Stripe is backed by Elon Musk and serves clients such as Alphabet, Amazon and Zoom, and has been hailed as one of the world's most valuable start-ups. It was valued at $65bn in a fundraising round in February 2024.

Other IPOs to watch

  • Klarna IPO: Klarna belongs to the ‘buy now, pay later’ (BNPL) industry that's taking the financial world by storm, with services allowing users to spread the cost of purchases over multiple transactions. Valued at $6.7bn in 2022, the company has over 150 million active consumers and recently set up a new UK-registered holding company to facilitate a potential IPO, which could take place in 2025.

  • Shein IPO: Fast fashion retailer Shein, valued at $66bn in a fundraising round in 2023, filed papers with the Financial Conduct Authority in June 2024, opening the door for a potential London listing​ this year.

FAQs

What’s the difference between a traditional IPO and a SPAC IPO?

The main differences between traditional initial public offerings (IPOs) and special purpose acquisition companies (SPACs) lie in their pricing and the length of the process. SPACs usually work on a shorter timeline and have smaller underwriting fees. Read more about SPACs

Can I short IPO stock on the first day?

Some trading restrictions usually apply after an IPO has gone live, so you may not be able to short the stock on its first day of trading. This will usually last for a few days. Learn how to short a stock

Can you lose money trading on IPO stock?

You can lose money when trading on a newly-listed IPO stock if the company underperforms, and the shares fall below the set IPO price. Risk-management controls, such as stop-loss orders, can help you to manage your risk when spread betting and trading CFDs.

Are IPOs a good investment?

IPOs offer the opportunity to gain exposure in the newly-listed shares of a company that has been privately run, particularly if the company fundamentals are promising, although there is no guarantee of future success. Learn more about conducting company analysis

Who sets the price of an IPO?

Investment banks and underwriters usually set the IPO price. Normally, the company will decide how many shares it wants to make available to the public, and then the nominated bookrunner will conduct a valuation of the company.


Disclaimer: 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.

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