A Wall Street Crash Course On TheTop 5 IPOs Of 2021
2021 included 1,057 IPOs, more than double the amount seen during any other year in history. This unprecedented frequency of companies going public showcases the vibrancy of the market and excites investors. An initial public offering (IPO) gives investors an opportunity to be a part of a stock’s growth from the ground floor. However, it’s difficult to evaluate a stock during its IPO, hence why volatility is at its peak when a company is first listed upon the market. As legendary investor Warren Buffet once said, “An IPO is like a negotiated transaction. The seller chooses when to come public, and it’s unlikely to be a time that’s favorable to you.”
This year’s bizarre market volatility affected IPOs tremendously; technology firms were hit the hardest as major sell-offs occurred in the second half of the year. Even the highly anticipated Robinhood (HOOD) lost 52% of its value since it’s IPO in July.
However despite the doom and gloom that had taken its toll on the IPO market, several stocks have thrived since going public in 2021. Let’s discuss the top five IPOs of 2021 and the reasons behind their successful campaigns.
Affirm Holdings (AFRM)
IPO PRICE: $49 CURRENT PRICE (DEC 29): $98.28
It’s not easy to take PayPal (PYPL) and Block (SQ) off of their respective pedestals in the fintech world, even if it’s momentary. Affirm Holdings (AFRM) did just that. The stock price increased over 110% in `2021, and much of that growth is owed to the company’s ability to beat revenue estimates in every quarter of the fiscal year.
The stock saw tremendous growth after a partnership with Amazon (AMZN) was announced. Using AFRMs technology, AMZN created a feature enabling customers to pay for items through monthly installments.
This and much more has led to analysts deeming AFRM a “buy”, incentivizing further investment from Wall Street.
It is questionable whether AFRM will be able to maintain its stronghold on the fintech market when the sleeping giants awaken. If so, it will be a fiercely competitive year for all companies involved.
Lesson to be learned: Don’t bully the new kid on the block
Jowell Group Ltd. (JWEL)
IPO PRICE: $7 CURRENT PRICE (DEC 29): $16.60
After shares of Jowell Group Ltd. (JWEL) were offered at $7 on the NASDAQ, investors had little to no interest. The stock price was stagnant for months until announcing impressive growth in gross merchandise volume, which indicates successful operating income. The 150% increase in GMV marks the third annual triple-digit increase that the firm has experienced.
The Chinese E-commerce company has a lot to prove in 2022, especially considering its volatility, however 2021 hints at another year of solid sales.
Lesson to be learned: Sales speak louder than words
Esports Technologies Inc (EBET)
IPO PRICE: $6 CURRENT PRICE (DEC 29): $17.00
Esports Technologies Inc (EBET) is a global provider of products and technology designed exclusively for competitive gaming. The stock saw a 200% increase in value since its IPO at $6 back in April. The stock, now $17 is only gaining interest from investors as the firm proves to be innovative within its field. EBET is filing for patents, including one in August that protects their invention and application of new betting algorithms used for esport tournaments. EBET is also aggressive in its acquisition of other tech companies. In October, EBET acquired Aspire Global’s B2C business.
As the prevalence of competitive gaming increases, the future could be bright for EBET. Lesson to be learned: The gamers rule the world
ZIM Integrated Shipping Services Ltd (ZIM)
IPO PRICE: $15 CURRENT PRICE (DEC 29): $57.06
ZIM Integrated Shipping Services Ltd. (ZIM) is an international cargo shipping company that has enjoyed 285% growth in 2021, making it the second-best preforming IPO of the year. ZIM was able to capitalize on the weakness of its competitors as 2021 marked a year of unprecedented supply chain constraints.
CEO Eli Glickman directly admitted that the time period marked an “anarchy in the world supply chain,” which naturally provides ZIM with an opportunity to outshine competitors. ZIM took this unique opportunity and ran with it, proven as the firm reported $1.5 billion in net income for the third quarter. The firm prides itself on its “asset-light model,” which helps them increase their profit margins thus reflecting well on the balance sheet.
Lesson to be learned: Timing is Everything
Digital World Acquisition Corp. (DWAC)
IPO PRICE: $10
CURRENT PRICE (DEC 29): $50.66
Digital World Acquisition Corp (DWAC) caused quite a stir this year. Digital World Acquisition Corp (DWAC) is a “SPAC”, or a “special purpose acquisition company”. A special purpose acquisition company is a firm that has no commercial operations and is simply structured to raise capital or for the purpose of effecting a merger. In November, DWAC announced that it would be bringing Trump Media & Technology Group (TMTG) public, attracting a plethora of investors in recognition of the former president’s influence over much of the country.
The former president plans to combat the censorship and political polarization of big tech, and believes that creating a media platform of his own will offer his supporters alternatives to Twitter (TWIT) and Facebook (META). The announcement sent the stock price up 400% in 2021, however, “Truth Social,” missed its November deadline to release an invitation-only beta version and there have been no official announcements nor sightings of an operational platform online.
According to CNBC, “the price of the stock of Digital World Acquisition Corp. has dropped dramatically since its share price exploded when the deal was announced in late October.” Furthermore, Trump’s last IPO from 1995 posted losses every year it was public, and filed for bankruptcy a decade later, marking his fourth bankruptcy thus far.
Lesson to be learned: Don’t Doubt “the Don”?
What were some of the other biggest IPOs in 2021? Let us know down in the comments.
This article originally published on GREY Journal.
This article was originally published in GREY Journal: https://greyjournal.net/hustle/finance/a-wall-street-crash-course-on-thetop-5-ipos-of-2021/
