• Market Crumbs

IPO Market Is Red Hot

Image via Gilly on Unsplash

You probably would've raised some eyebrows if you told someone earlier this year as the market was plummeting that the IPO market would stage a remarkable comeback and show signs of euphoria reminiscent of the tech bubble.

With markets recovering from their lows and subsequently, continuously making new all-time highs, a slew of unicorn startups are rushing to IPO before the end of 2020.

Food delivery giant DoorDash attracted strong interest from investors when it went public on the New York Stock Exchange on Wednesday. After initially anticipating shares to price between $90 and $95 per share, they ended up pricing at $102 per share before opening at $182 per share. DoorDash continued soaring to nearly $200 per share, before finishing the day up more than 85%.

DoorDash, which has seen its business become a necessity to many amid the pandemic, now has a market capitalization of nearly $60 billion. The company had $1.9 billion in revenues so far this year through the end of September compared to $587 million over the same period last year. DoorDash is closing in on profitability as its net loss narrowed to $149 million from $533 million over the same period last year.

Artificial intelligence software company C3.ai went public on Wednesday as it opened on the NYSE at $100 per share after pricing its IPO at $42 per share on Tuesday night. An initial spike after trading began took the company's market cap close to $10 billion. The IPO even enabled Microsoft, which has a partnership with C3 AI to sell its software running on Microsoft's Azure cloud, double its money after investing in the company last month.

"The markets will do what the markets will do," C3.ai founder and CEO C3.ai Tom Siebel said. "This is a financing event for C3 to enable us to meet the needs of rapidly expanding demand for what we do ... and we're very pleased to be able to participate."

Airbnb capped off a strong week for IPOs yesterday as shares soared 112% on their first day of trading on the Nasdaq. After pricing shares at $68 Wednesday night, Airbnb opened at $146 per share and finished the day with a 112% gain.

The company now has a market cap of $85 billion, exceeding the combined value of hotel giants Marriott and Hilton, which have market caps of $42 billion and $29 billion, respectively.

Following a busy week of IPOs, all eyes will now be on the highly-anticipated IPOs of Roblox, Wish and Affirm which are all expected before the end of the year.

Leftover Crumbs

  • CVS is ready to go. CVS Health said it has 10,000 employees ready to administer COVID-19 vaccines at long-term care facilities within 24-48 hours once it receives the doses. The U.S. Department of Health and Human Services agreed to a deal with CVS and Walgreens earlier this year to administer the vaccine to residents and staff at the facilities for free. "We're ready to go," CVS Health CEO Larry Merlo told CNBC. "Pending approval, I'm confident that we'll be in thousands of facilities before the Christmas holiday."

  • Amazon reaches big milestone. Amazon announced 26 new wind and solar energy projects yesterday that will make it the largest corporate purchaser of renewable energy. Amazon's total investment in wind and solar projects now totals 6.5 gigawatts (GW) of electricity production capacity. "With a total of 127 solar and wind projects, Amazon is now the biggest corporate buyer of renewable energy ever," Amazon founder and CEO Jeff Bezos said. "We are on a path to running 100% of our business on renewable energy by 2025 — five years ahead of our original target of 2030."

  • Boeing 737 MAX returns to service. On Wednesday, Boeing's 737 MAX took its first commercial flight with paying customers since the aircraft was grounded two years ago. Brazil's Gol Airlines flew a 737 MAX 8 from São Paulo to Porto Alegre, according to flightradar24.com. "I was a bit apprehensive but my husband is a pilot, so I asked him. He said it was fine," passenger Lucelyn Jockyman said. "If anything happens, look after my dogs please!"

  • Home equity gains reach $1 trillion. According to CoreLogic, U.S. homeowners with mortgageswhich represents about 63% of properties, have collectively seen their equity increase by $1 trillion over the last year. "Over the past year, strong home price growth has created a record level of home equity for homeowners," CoreLogic chief economist Frank Nothaft said. "The average family with a home mortgage loan had $194,000 in home equity in the third quarter. This provides an important buffer to protect families if they experience financial difficulties."

  • SPAC deal takes Weedmaps public. Weedmaps, a platform where users can find and rate marijuana sellers, will go public as its parent WM Holding Company will merge with Silver Spike Acquisition Corp. The deal will value Weedmaps, which has reported profits each year in its 12-year history, at $1.5 billion. "When you look at what we're offering (to investors), there's really not too much else like it," WMH CEO Chris Beals said.