IPO Intensity Meets M&A Mania!
Not only is merger-and-acquisition (M&A) activity setting new records for deal flow, but initial public stock offerings (IPOs) are likewise ramping up in intensity this year.
And there’s plenty of money to be made in select, special situations in both types of deals.
The numbers are in and 2019 IPO activity ramped up significantly during the just-closed Q2 2019.
Rate of IPOs DOUBLES!
Seventy-five new IPOs raised nearly $30 billion during the three months ending with June, a staggering amount and nearly DOUBLE the IPO pace during Q1 — making it the best quarter for total IPOs in almost five years!
Just take a look:
Uber Technologies Inc. (NYSE: UBER), the well-known ride-hailing service, led the way with an $8 billion IPO in May. That was followed closely by social media site Pinterest Inc. (NYSE: PINS) and Tradeweb Markets Inc. (NASDAQ: TW), which raised $3.3 billion and $1.2 billion, respectively.
All those stocks surged from their IPO price — although UBER has come down from recent highs amid worries about competition from its industry rival Lyft Inc. (NASDAQ: LYFT).
Another recent highflying IPO that has grabbed a lot of press is Beyond Meat Inc. (NASDAQ: BYND), the healthy alternative to the classic American burger.
But be careful with this one — BYND soared an astounding 250% since the low on its first day of trading, giving the company a nosebleed valuation.
In fact, BYND’s stock trades at a lofty 100x sales (of just $88 million last year). By comparison, McDonald’s (NYSE: MCD) trades at less than 8x sales and Tyson Foods Inc. (NYSE: TSN) trades for less than 1x sales.
Note to BYND stockholders: Look out below!
Which Sectors Are These IPOs Happening In?
Taking a closer look at sectors with the hottest IPO activity:
It’s no surprise that tech led the way with 15 IPOs last quarter, raising $14.9 billion, followed by the financial sector, where 17 deals raised $3.4 billion.
And there are plenty more IPOs to come this year.
In fact, 60 companies have filed to go public and are still in the registration process, with nearly half of them filing in June alone.
That tells me investors can expect a strong pipeline during the second half of 2019.
Get ready to profit!
Here’s to growing your wealth,
Chief Income Expert