What to Watch as the IPO Heat Turns Up

Initial public offerings are generating buzz again, and share prices of tech listings have doubled on average this year. The Nasdaq has been at an all-time high, today’s big-tech stock sell-off notwithstanding. And Chamath Palihapitiya is raising money for a special purpose acquisition company. 

Are we about to hit a speculative IPO and SPAC frenzy reminiscent of 2021? 

It’s starting to feel like it, at least for companies in crypto or artificial intelligence. Retail traders have bid up those stocks rapidly. That fervor, in turn, makes hedge funds and asset managers eager to get a piece of every new listing, fearful of falling behind their peers. And ’round and ’round we go.

Just how hot the IPO market gets is a dominant storyline going into the fall, when new listings will pick up in earnest. Venture capitalists and their limited partners, who haven’t seen much cash returned on their investments recently, are watching, hoping and praying.

Here’s my cheat sheet for what to watch in the upcoming IPO and SPAC markets: 

Will unprofitable companies make friends with investors?