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Comment by marricks | Hacker News Reader

I don't remember ever seeing this many S-1 listings on HN. Are they just a new thing? Did I miss them before? Is there something large happening in the market?

EDIT:

- If this first ddg result is to be believed there are 20% more IPOs than last year https://stockanalysis.com/ipos/2020-list/

- There's actually a thread on this, so perhaps downvote this and read/comment/speculate there https://news.ycombinator.com/item?id=24265456

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I've seen a theory that companies are trying to get IPO'd now, in anticipation of a weaker market in the future.

I think this theory tends to be based on the idea that the current state of the stock market does not reflect reality for many businesses (and the economy as a whole), nor their future prospects, and that a correction is imminent.

Obviously this is speculation, but it's interesting because someone probably does know - there's probably some overlap in the advisory banks for these IPOs, and they must have some idea of the thinking of the executive teams of these companies.

My thoughts exactly. I wonder if businesses are looking for or needing funding, and the stock market is the one place that looks fine.

There's a lot of filings nearly every week nearly all the time. What has changed is the composition, that is there's far more "tech".

Do you recognize even half of those? And this is just one exchange in one country.

https://www.nasdaq.com/market-activity/ipos

Apparently there are ~20% more IPO's than last year. https://stockanalysis.com/ipos/2020-list/

So if there are more IPOs and more tech IPOs that's kinda weird on weird.

There are also lots of SPACs (Special Purpose Acquisition Companies), like 27 of them just in August. A simple way of entering public markets bypassing the regular IPO path and required filings.

It does not really bypass filings. You have to file a different form (not S-1) when you do the SPAC-merger. Securities law is not that stupid :)

Thanks for clarifying. Any major differences between the two forms?

There was a good thread yesterday that covers some possible reasons: https://news.ycombinator.com/item?id=24265456

One explanation that was offered was that there are a ton of IPOs all the time: https://www.nasdaq.com/market-activity/ipos

These just made it on to HN as there were some big names in the mix (Asana, AirBnB, Unity, SumoLogic, Snowflake, Palantir, etc). Now, its not clear to me why all of these larger tech companies are going for it this week however...

S-1 is the new Show NH

Really though, S-1 is the old Show HN. In the dot com bubble, companies would go public before they built the product. The only company I heard of doing that recently was Nikola, and they didn’t go through the IPO process.

Absolutely, I doubt any company that is convinced their IPO would be oversubscribed is going to avoid it.

Companies need capital? Just a guess, but this seems like a time when they might be running a little short.

You should see what's happening in the biotech sector. This will be a record year with 40+ IPOs.

I was wondering that too and got some good answers: https://news.ycombinator.com/item?id=24265456

The issuers doing S-1's are just of public interest and in the same circuit of companies that many people on HN consider joining or use the tools of. As such, many people have been interested in their shares being publicly traded for a long time.

IPOs have become less common due to regulations as well as adequate growth of the private secondary market following more coordination by accredited investors, but they used to be 3x more common and at much lower valuations.

Something is definitely moving in the market. A lot of these IPOs (Unity, Palantir, AirBnB, etc.) were highly anticipated months back already.

Gotta cash out before the fall/winter wave of covid lets everyone know that the economy is not actually back to normal.

look at the stock market - never in history have we ever reached new all time highs that keep getting smashed every day during a recession. the Federal Reserve printed trillions over last 5 months to save the markets.

now we just have to wait and see what the “cost” of it all is because we’re all treating it as a free lunch

The stock market numbers have been pumped up for years now, and how convenient they are planning on the crash right after elections

I think getting listed before the uncertainty of the election might have something to do with it?

Trying to get out for the payday before the economy totally tanks (T-1 months)

It is probably not going to crash before the election - although there could be temporary dips. Unless the October surprise turns out to be particularly dire.

After the election, it probably will. No matter the result.

See this economist article with some analysis of the numbers:

https://www.economist.com/business/2020/08/22/initial-public...

(Discussed recently: https://news.ycombinator.com/item?id=24232199)

TLDR, comparing the year-to-date, tech IPOs are on the high end historically, but not outlying the historical range (I make it just in the top quartile for IPO count). Considering all IPOs (tech and non-tech) though, there are more than any time in the last 15 years.

So yes there are more IPOs, but that doesn't explain why there are more tech IPOs being posted on HN.

agreed, what's going on? Cash in before second long term crash/recession?

That's what someone suggested on one of yesterday's IPO listings. A massive stock crash seems, uh, reasonable to expect. If owners are cashing out before things go south seems reasonable. Also depressing.

I've been really reminded of the Big Short, housing market shot up before the big crash so others would be left holding the bag... musical chairs isn't just for preschoolers I guess.

Wondering the same thing! And where's AirBNB in this.

https://news.ycombinator.com/item?id=24216111

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