The market for initial public offerings (IPOs) has struggled to see the same enthusiasm it had in 2021, when 397 offerings raised $142.4 billion in proceeds. While 2026 has gotten off to a slow start — 71 IPOs have raised $35.7 billion — a string of highly anticipated offerings is signaling renewed excitement for IPOs.

First up was the SpaceX IPO, Elon Musk's space and exploration company going public in the largest offering ever and SPCX stock now trading on the Nasdaq.

The Kiplinger team is reported on the SpaceX IPO, bringing you the news and our expert analysis of what this means for the stock market, the economy and your money. Scroll for the updates.

Should You Buy SPCX Stock? | Hot Upcoming IPOs to Watch | The Space Sector Prepares to Blast Off

What is SpaceX?

Elon Musk founded SpaceX in 2002, intending to lower costs for space launches and eventually build a livable colony on Mars. The company had its first successful space launch in 2008 and has since had more than 650 total launches. It also wants to build data centers in space.

"A key to its success has been a relentless focus on innovation," writes Kiplinger contributor Tom Taulli in his feature on the hottest upcoming IPOs to watch for. "The company's breakthroughs include reusable orbital rockets, which have greatly reduced the costs of space flights; vertical rocket landings; and onboard autonomous systems."

In 2015, SpaceX moved to diversify its revenue stream with Starlink, a satellite internet project that today provides coverage to roughly 10 million customers across 160 countries and territories. It also has contracts with the U.S. Department of Defense to provide satellite service through its Starshield segment to government and military organizations, including with Ukraine during its war with Russia.

Geopolitical conflicts are increasing the demand for satellites, and the conflict in the Middle East shows "how space tech is crucial for missile warning and tracking, communications, surveillance, drone and vehicle connectivity, and more," writes John Miley, senior associate editor at The Kiplinger Letter.

SpaceX also bought xAI, Musk's artificial intelligence (AI) company that owns X (formerly Twitter), in February 2026 in an all-stock deal valued at roughly $250 billion. In May, Musk announced that xAI is fully absorbed by SpaceX and will rebrand as SpaceXAI.

According to its S-1 filing, which became publicly available on May 20, SpaceX had revenue of $4.7 billion in the three months ended March 31. It also incurred a loss from operations of $1.9 billion and had adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $1.1 billion.

In 2025, the company's revenue totaled $18.67 billion, while adjusted EBITDA arrived at $6.58 billion.

SpaceX is poised to benefit from surging growth in the global space economy, which is expected to reach $1 trillion by 2034, according to Novaspace, up from $626 billion in 2025. "The U.S., led by SpaceX launching 85% of spacecraft into orbit and its Starlink Internet service, reaps most of the business," says Miley.

- Karee Venema

Space is hard

One thing I've heard over and over again from space analysts, investors and executives: "Space is hard."

The industry mantra may seem like a tired cliché or even an excuse for mishaps and bad business decisions, but it's true. The incredibly capital-intensive industry requires extraordinary feats of engineering and technology. Things can go wrong suddenly, as seen in the recent explosion during a Blue Origin engine test. Funding could dry up as timelines get extended and revenue is slow to appear.

So, when looking at the space sector, keep in mind that delays are common and outright failures happen. Or, to echo another industry cliché, it's literally rocket science.

- John Miley

How to buy the SpaceX IPO

Allocations of IPOs — especially hot ones — typically go to institutions and wealthy investors. This is a way for investment banks and brokerages to reward their best clients. This usually means that allocations for retail investors are small, say 5% to 10% of the number of shares issued.

But with the upcoming SpaceX IPO, the script will be different. The company has set the allocation up to 30%, or about $23 billion in market value.

Here are the brokerages that have been assigned to distribute the shares:

• E*Trade
• Fidelity
• Schwab
• SoFi
• Robinhood

Each firm has its own requirements. Yet there is a general process for retail investors to buy SpaceX shares.

• Investor questionnaire: You will need to fill out a form that gauges whether you meet the firm's eligibility criteria. This might include an account minimum, investor experience and risk tolerance.
• Offer: The firm will provide access to SpaceX's prospectus, which is the disclosure document for the IPO. You will then submit an indication of interest or conditional offer — that is, the number of shares you want to buy. This is for a price range. When the IPO is priced, which typically happens the night before the public offering, you will confirm the indication of interest.
• Allocation: On the day of the IPO, the firm will notify you if you received shares.

Keep in mind that you are not guaranteed to receive shares. If there is substantial demand for the offering, there may not be enough for the retail investors who submitted their indications of interest. Furthermore, each firm will have its own procedures for allocations. For example, if an investor "flipped" a prior IPO, which is when they sold shares soon after the offering, they may not get an allocation.

Then again, some firms have fairly straightforward approaches. In the case of Robinhood, it's solely based on a random allocation.

- Tom Taulli

What is the SpaceX IPO share price?

On June 3, SpaceX updated its S-1 filing to show that it priced its offering at $135 per share. Based on the roughly 555.6 million Class A shares it is selling, SpaceX will raise $75 billion, easily making it the biggest U.S. IPO ever. Chinese tech conglomerate Alibaba Group Holding (BABA) currently holds that title, having raised $4.6 billion in its March 2021 offering.

Most companies offer a price range for their offering in the week or so leading up to their IPO and then set a final price the night before their stock begins trading on public markets. And SpaceX could change its price later today, but it's widely expected that the $ 135-per-share price set by CEO Elon Musk last week will be the final offer.

There are likely several reasons for this, including Musk's likely desire to take SpaceX public on his terms.

Additionally, there's massive demand for SpaceX shares. According to some estimates, the IPO is 3.3 times oversubscribed, meaning demand for SPCX stock has more than tripled the number of shares available for purchase. This suggests that shares could see a big first-day pop given the supply-demand imbalance.

- Karee Venema

The SpaceX IPO is increasing excitement around the space industry and consolidation could be coming

Similar to the AI industry, there's immense excitement about space, supercharged by SpaceX's IPO. That's led to venture capitalists betting big on a growing number of start-ups.

Generally speaking, there are too many companies, even as the overall global market is poised to grow. Look for a wave of consolidation as things shake out over the next three to five years.

SpaceX's dominance could be a driving force in this trend as it aggressively seeks to control both traditional and new markets. When SpaceX decides to get involved in a particular segment of space, its competitors get nervous.

- John Miley

SpaceX will not be fast-tracked into the S&P 500

Several exchange operators have recently changed their rules to fast-track inclusion for mega-cap IPOs, including SpaceX.

Nasdaq (NDAQ), for instance, unveiled new "fast entry" rules in early May that allows it the ability to accelerate the time frame in which large companies are added to its Nasdaq-100 Index. Previous rules required that a company wait up to a year before being included in the index, but its new requirements lower the eligibility for inclusion to just 15 days.

"That's important for a number of reasons," explains Kiplinger contributor Dan Burrows in his feature on the Nasdaq's new fast entry rules. "For one thing, the delay stops hedge funds from front-running ETF investors. Under the new rules, hedge funds could buy the stock on the day of the IPO, then flip it to passive investors just 15 days later. That's basically a wealth transfer from long-term index investors to fast-money pros."

Additionally, it forces institutional investors to buy SpaceX shares once the company is included in the indices their index funds track.

But one index that SpaceX will not be allowed fast entry to is the S&P 500. "Based on S&P DJI's Index Committee review of the markets and after consideration of responses received from a wide range of market participants, no changes will be made to the eligibility criteria including financial viability screens, seasoning period, or minimum IWF, for the S&P 500, S&P MidCap 400, or S&P SmallCap 600 as a result of the S&P Dow Jones Indices consultation on the treatment of MegaCap companies," wrote S&P Dow Jones Indices in a June 4 release. "Accordingly, there will be no changes to existing methodology for this index family."

Specifically, S&P Dow Jones Indices chose to keep several rules in place, including one that requires a company to trade on a major exchange for 12 months before being considered for inclusion in an index.

So, while SpaceX shares will likely make their way into several index funds within the next several weeks, they will not be in S&P 500 ETFs for at least the next year.

- Karee Venema

Related content: Invested in Index Funds? Here's What You Need to Know About Mega-Cap IPOs

Just how dominant is SpaceX as a company?

To underscore SpaceX's dominance, consider that it had 165 launches in 2025, vastly more than any other rocket launcher, and launched 85% of global spacecraft into orbit. Its small satellite constellation, Starlink, is by far the leader in
internet speed and customers.

Unlike many space companies of years past, SpaceX is vertically integrated. It makes its own satellites, antennas, rockets, engines and all sorts of other equipment. It will build its own AI satellites, and plans to even start making its own computer chips through a partnership with Intel (INTC). Controlling all aspects of the business gives it an ongoing edge.

Perhaps an underappreciated competitive threat to SpaceX's Starlink is Amazon's (AMZN) upcoming Leo broadband service. I've tracked Amazon's planned mega-constellation over the years, and my impression is that they are very serious about winning consumers, businesses and governments.

Amazon has deep pockets and is touting how its Leo broadband service will integrate with its AWS cloud computing business. It could even offer discounted broadband for Amazon Prime subscribers.

Of course, Amazon must rely on outside rocket companies, including SpaceX, to get thousands of its satellites into orbit.

Blue Origin, which is owned by Amazon founder Jeff Bezos, could help if it starts launching a lot more in the coming years.

But Blue Origin only had two launches last year, failed to put AST SpaceMobile's satellite into orbit in April and had a massive launchpad disaster last month.

– John Miley

What Renaissance Capital's Avery Marquez is expecting from the SpaceX IPO

Few IPOs arrive with the level of anticipation surrounding SpaceX. The company's scale, brand power, retail investor interest and unusual deal structure have already made it one of the most talked-about offerings in recent memory. But the IPO also comes with significant complexity, from expected volatility and staged lockup releases to the possibility of fast-tracked index inclusion.

For perspective on what this could mean for investors and the broader IPO market, I spoke with Avery Marquez, director of Investment Strategies at Renaissance Capital, a provider of pre-IPO research and IPO-focused ETFs.

Your thoughts on the prospects for the IPO?

It's hard to contest the general consensus that this will be a hot deal. Forgoing the typical range for a set price is a solid indicator that the deal is already covered, or at least that the company and underwriters are confident in the massive demand this is expected to generate.

Early trading will likely be very volatile, especially with such a large portion expected to go to retail. I've seen reports still indicating up to 30%. I believe the extensive lockup release schedule and "forced buying" by indexes fast-tracking inclusion will also lend to some interesting trading dynamics in the first few weeks and months.

How does this compare to other large IPOs?

I'm partial to say that there is no real comparison. You can look at something like Saudi Aramco, which is the closest example in size, but the dynamics were quite different, given the government involvement and the market's relative opacity (though worth noting that the Tadawul is more transparent now than back in 2019).

In the U.S., Facebook — now Meta Platforms (META) — may be worth comparing, given the size, governance structure and disruptive tech pitch. But the months of hype leading up to the IPO, the intricacies of SpaceX's business, the sheer number of moving parts make this a wholly unusual deal.

What about the lock-up? Implications?

SpaceX's lockup is one of the most complex I've ever seen. Given the float dynamics, it could be framed as a bid to control that potential flow, or maybe it's just a way to give early investors liquidity before the standard 180 days. I do wonder how much overlap there will be between the release schedule and the schedule of indices that will now be fast-tracking inclusion.

How important is this IPO? What might it mean for the expected IPOs of OpenAI and Anthropic?

It's difficult to point to this as a bellwether for broader IPO activity, given how unusual the deal is. It will be a test of demand at scale, however, which will be particularly important for OpenAI and Anthropic, given how much capital they are expected to raise at IPO. Overall, it's going to be a historic test for the IPO market and will show us how much hype or FOMO is being baked into these high-profile names right now.

- Tom Taulli

Blue Origin explosion highlights the challenges facing a heavy launch

As SpaceX moves from the reusable Falcon 9 to the much bigger Starship, it's worth noting the unique challenges of heavy launchers. Starship is nearly 400 feet tall, while Falcon 9 is 230 feet tall. Starship can lift far heavier payloads, but that requires more powerful engines.

The challenge of a heavy launch was on display during the recent Blue Origin explosion. Its New Glenn rocket is also a heavy launcher. After the incident, NASA Administrator Jared Isaacman said on X, "Spaceflight is unforgiving and developing new heavy-lift launch capability is extraordinarily difficult."

In May, Elon Musk said on X that he was confident about Starship's road to commercialization: "The Starship production pipeline is full and will complete roughly 10 more ships and about half that number of boosters this year, so, if something goes wrong, it will not be a major setback, unless the launch stand is destroyed."

Back in 2020, Musk already had a clear view of Starship's importance, saying it "needs to be reusable and rapidly so, designed to be relaunched an hour after landing with zero nominal work."

- John Miley

Elon Musk reveals space's first space-based AI data center

In a video posted on X, Elon Musk talked about his vision for space-based AI data centers. The first one is called the AI1 satellite, which is expected to be 230 feet long and provide 120 kilowatts of compute power.

The AI1 satellite is based on the core foundation of the Starlink V3 system. According to Musk: "The AI satellite is much simpler than a Starlink satellite. The AI satellite is essentially a lot of solar cells, you still need some laser links, but you don't have all of the super complex antennas that you have on a Starlink satellite. The easier one to design for is the AI satellite."

The AI1 satellite is also expected to include Nvidia (NVDA) GPUs to power the AI processing.

In terms of timing, SpaceX expects to launch demonstration versions of the system in late 2027. So it could easily be a few years until the company generates any revenue from this program.

And Musk has a tendency to overpromise.

Still, space-based data centers are likely to gin up lots of excitement for investors. Land-based systems consume enormous amounts of power and are increasingly running into backlash from communities concerned about electricity demand, water usage, noise and local infrastructure strain. But in space, a data center could tap solar power directly and avoid many of these earthly constraints.

- Tom Taulli

SpaceX's big bets won't come in a hurry

The entire space ecosystem hinges on the success of Starship driving down launch costs. Some space business ideas only pencil out if launch costs are lowered to a certain point.

SpaceX has dreams of launching Starships daily or even hourly to send 1 million AI data centers into space. But how much it costs SpaceX to launch Starship and the price it charges outside customers are different. It may use most or all of Starship's capacity on its own orbital data centers.

While SpaceX has drastically lowered launch costs with its reusable Falcon 9, it's not passing all those savings over to customers, since it controls the market. Still, it does continue to have good relationships with all its customers.

Other launchers include Rocket Lab, Arianespace, United Launch Alliance and Firefly Aerospace. Rocket Lab ranked second globally in commercial launches last year with 18.

SpaceX takes the long view and dreams big. I often remind readers that SpaceX is 24 years old. Starlink was announced in 2015, and the first satellites were launched in 2019. It took a long time for SpaceX to get to this point.

When you look over SpaceX's prospectus and investor presentation, you see plans that could take years or decades to happen, including a mission to Mars. SpaceX will keep betting big on missions that will take a long time to pan out, using money from today's successes to fund tomorrow's dreams. Such a strategy carries inherent risk.

Consider that Musk has said, "The whole purpose of SpaceX is to help make life multiplanetary."

- John Miley

Hyperliquid SpaceX perpetual futures signal a big premium to IPO price

Perpetual futures on Hyperliquid, a decentralized blockchain-based trading platform, showed SpaceX shares trading around $168 at last check — a nearly 25% premium to the $135 IPO price. Still, that's down more than 6% from where the SpaceX "perp" was trading a month ago.

Hyperliquid has become a place for traders to speculate on assets such as cryptocurrency and commodities without actually owning them.

"Perpetuals never expire and users can hold positions indefinitely," explains BofA Securities analyst Julie Hoover. "Because there is no maturity, venues employ a funding-rate mechanism to keep perp prices anchored to the spot price. Volume on perps has tripled from ~$30T in 2023 to ~$93T in 2025."

According to BofA, Hyperliquid, in particular, has become popular for its pre-IPO pricing markets. "Like prediction markets gained popularity for calling the U.S. Presidential election, people argue that Hyperliquid is having their moment for accurately predicting IPOs."

If Hyperliquid's pre-IPO pricing of SpaceX perps is accurate, shares could be poised for a big jump when they first start trading.

- Karee Venema

SpaceX's unconventional IPO pricing

Elon Musk has always had a penchant for being unconventional. It has certainly been key to his many successes and his enormous wealth. So it should be no surprise that the SpaceX IPO has taken a different path from the traditional Wall Street playbook.

In a typical IPO, the company and its underwriters set an initial price range, conduct a roadshow, collect orders from investors and then determine the final price based on demand. This process is called "book building." It's a way to gauge investor demand. If the demand is strong, the company will set the deal at a higher price and vice versa.

The SpaceX IPO, on the other hand, has used a fixed price approach. According to Reuters, SpaceX set the IPO price at $135 per share, with plans to sell 555.6 million shares and raise about $75 billion. This would value the company at roughly $1.77 trillion.

The valuation was likely based on SpaceX's own internal assessment of the business and its long-term opportunities. But this was not just about traditional metrics such as revenue, earnings or comparable companies. A big part of the valuation was probably the "Musk factor." He has a long track record of making money for investors, and he has built a large base of loyal retail followers.

Still, the approach carries risks. The IPO is massive, the valuation is aggressive and the markets have been volatile lately. Even for a company like SpaceX, that makes the debut far from risk-free.

- Tom Taulli

The economics of AI data centers

Orbital data centers are unproven, though some companies have already launched prototypes. The economics of AI data centers in space is a big question mark. Can they really compete with terrestrial data centers? SpaceX certainly thinks so.

Consider the vast scale Elon Musk is talking about. Nearly 2,200 tons were launched into orbit in 2024. During a presentation this year, Musk talked about launching 10 million tons into orbit per year to put a terawatt of compute into space yearly.

Sound impossible? Musk's response: "We're confident this is feasible. No new physics or impossible things are required to get there."

Musk also envisions humanoid robots manufacturing satellites on the moon and then using electromagnetic mass driving to send them into orbit. Pursuing these ventures will be enormously expensive.

- John Miley

SpaceX confirms IPO pricing

Shortly before the close on Thursday, SpaceX set its final pricing for its initial public offering, confirming (PDF) that it will sell 5.6 million shares at $135 apiece.

The company also said that it will grant its underwriters a 30-day option to buy up to 83.3 million additional shares of its Class A common stock.

At $135 per share, SpaceX is poised to raise $75 billion in its offering, which will make it the largest IPO ever, easily exceeding the current record holder — Alibaba Group Holding (BABA) and its $21.8 billion offering in 2014. It will also give the company a $1.75 trillion valuation, making it the seventh-largest U.S. company by market cap and just ahead of Musk's other public company, Tesla (TSLA).

- Karee Venema

Stocks close higher ahead of SpaceX's market debut

Stocks closed higher Thursday after President Donald Trump walked back a threat to strike Iran "VERY HARD" on Thursday night and take "total control" of its oil and gas assets.

"Based on the fact that discussions with the Islamic Republic of Iran have been brought to the highest level of Iranian leadership and approved," Trump posted on Truth Social, "I have, as President of the United States of America, cancelled the scheduled strikes and bombings against Iran this evening."

A rebound in chip stocks also helped the broader markets bounce back from early week losses, though AI stock Oracle (ORCL) tumbled sharply after its earnings report on cost concerns.

By the closing bell, the blue-chip Dow Jones Industrial Average was up 1.9% at 50,848, the broad-based S&P 500 was higher by 1.8% at 7,394, and the tech-heavy Nasdaq Composite had added 2.5% at 25,809.

Read more: Dow Adds 929 Points on New Signs of Peace: Stock Market Today

That's it from us today. Join us tomorrow for more updates and insight into the SpaceX IPO.

Stock futures point mostly higher on SpaceX day

The main equity indexes are trading mostly higher ahead of SpaceX's (SPCX) market debut.

At last check, futures on the blue-chip Dow Jones Industrial Average are up 0.3% and the broader S&P 500 are 0.1% higher. Futures on the Nasdaq-100 are down 0.3% lower, though, as Adobe (ADBE) slumps after earnings.

SpaceX gets mixed reviews from Wall Street

One reason there have been few analyst reports on the SpaceX IPO is that the company hired 23 banks for the offering. Keep in mind that they are under strict conflict-of-interest rules and must endure a 25-day quiet period.

But this week, several interesting reports from analysts surfaced that were not part of the IPO syndicate. On the bullish side, New Street Research set a $165 price target on SpaceX shares, representing a 22% premium to the IPO price. This is based on a $195 billion revenue projection for 2030.

Additionally, Oppenheimer initiated coverage on SPCX stock with a Buy rating. The price target: $190.

But Morningstar published a report that was quite bearish. Analyst Nicolas Owens puts the valuation on SpaceX at only $63 per share, or a 53% discount to the IPO price.

"Our valuation is the result of mathematics more than skepticism," says Owens. "With such a wide range of possible outcomes for the company's financial future, we created forecasts and valuations for three scenarios and probability-weighted them."

- Tom Taulli

What time will SpaceX stock start trading?

SpaceX stock will likely start trading on the Nasdaq this afternoon. New stocks typically make their market debut after lunchtime, so look for shares to open for trading around 1 pm to 2 pm Eastern Standard Time.

SpaceX IPO will boost funding and attention to space stocks, but investors must be aware of risks

Related to Elon's vision of a Mars mission and taking the long view, here's a quote I have in my notes from a keynote I attended at the 2020 satellite conference in Washington, D.C.: "I hope I'm not dead by the time people come to Mars. If we don't improve our pace of progress, I'm definitely going to be dead before we go to Mars. If it's taken us 18 years to get people to orbit, we have to improve our pace of innovation a lot."

With a huge amount of funding from the IPO, there's no doubt the intense focus on pushing the "pace of progress" will only accelerate.

As I wrote in April, SpaceX's stock listing will bring a new wave of capital to the entire sector, including from a flood of retail investors. Investors in the space sector are bullish about SpaceX's unprecedented stock listing.

The IPO is an "inflection point" for the space industry, said Michael Mealling, general partner at Starbridge Venture Capital, at SatShow. Mark Boggett, CEO of Seraphim Space, said it will pull up valuations across the entire sector.

The heightened attention means that more Wall Street analysts will start covering the sector as space companies are included in more stock funds and more space companies go public.

Investors should know that space stocks can be risky, requiring due diligence, and that the frenzy among investors could outpace the reality of individual businesses.

"I am a little concerned about public market investors looking at the space sector and not understanding the level of risk," said Mealling. "Not every company that goes public is a good company." Mealling also said that having lived through the dot-com bubble of the late 1990s, "I hope we don't replicate that."

- John Miley

Neuberger Berman's Daniel Hanson on why SpaceX fits a quality equity strategy

Daniel Hanson, manager of the $2.1 billion Neuberger Berman Quality Equity Fund (NBSLX), has delivered strong results, with the fund generating an average annual return of 24.2% over the past three years. One of the more distinctive parts of the portfolio has been its pre-IPO investment in SpaceX.

I had a chance to interview Daniel and here's what he had to say:

When did you start buying SpaceX? What were the factors for making the investment? What is the current allocation?

We established the NBSLX position in SpaceX in the second half of 2023 at a company valuation of $150 billion, based on SpaceX's alignment with the Quality Equity investment philosophy. I look for 3 criteria for any Quality Equity investment, all of which SpaceX is aligned with: strong profitable growth, an entrepreneurial management team and an ownership culture. It also has a clear business purpose. The NBSLX fund's pre-IPO private allocation was approximately 7%.

What's your bullish case for the next few years? Drivers?

SpaceX comprises three distinct leadership mega-cap businesses, each of which has a promising growth outlook.

First is the launch business, where SpaceX has an unmatched global lead with the Falcon 9, and exceptional upside with the Starship program.

Second is the Starlink business, currently with 11 million subscribers and rapid growth prospects to add tens of millions of incremental subscribers.

Third is the xAI business, which has both leading proprietary initiatives, including 500 million+ monthly active users on Grok and X.com, with highly profitable third-party data center compute contracts with the likes of Anthropic and Alphabet (GOOGL). There is also its market-leading ambitions to commercialize orbital data centers in the coming years.

Besides SpaceX, does your firm have any other private investments?

Yes, Neuberger has a large private equity business.

The Neuberger Berman Quality Equity Fund was the only direct private pre-IPO owner of SpaceX at Neuberger due to the strong track record of the SpaceX team and the alignment of the business with the Quality Equity investment approach.

- Tom Taulli

How worried should investors be about the "Musk Effect"?

Perpetual futures are indicating a big jump for SpaceX stock when it begins trading this afternoon, last seen trading near $180 — 33% above the IPO price.

Part of this is likely due what many refer to the "Musk Effect. As I told CNET, Elon Musk has the tendency to stoke enthusiasm given the number of extraordinary things he's done, and we're seeing that in the excitement surrounding the SpaceX IPO.

"I don’t think the 'Musk Effect' is some made-up premium ... it's backed by execution over and over again," says David Fetherstonhaugh, senior vice president and investment strategist at VistaShares. "There is something real there."

For SpaceX, specifically, Fetherstonhaugh points to the company's aggressive launch cadence over the past several years. "SpaceX did 25 launches in 2020. Then 31. Then 61. Then 96. Then 134. Then 165 last year. At some point, that is not a cool stat anymore. He is actively pushing the boundaries of multiple industries."

And impressive growth in Starlink revenue, which jumped 50% year over year in 2025, will help fund SpaceX's other initiatives.

Fetherstonhaugh admits that the SpaceX IPO is not cheap, but says that "no other public company that gives you this combination of launch, satellites, connectivity, and full-stack control of space infrastructure." So, if you buy SPCX stock, you're "paying up for execution, speed, and the possibility that the market is much bigger than investors originally thought."

However, buyers should know that the "Musk Effect" goes both ways. Folks were quick to sell Tesla shares and stop buying Tesla cars in early 2025 in part because of a backlash related to Musk's actions and commentary when he was head of the Department of Government Efficiency (DOGE).

As Fetherstonhaugh cautions, "anything tied to Musk is going to come with volatility."

- Karee Venema

Elon Musk's net worth could top $1 trillion today

Elon Musk has long held the title as the richest person in the world, but he cemented that status following SpaceX's blockbuster IPO, which will likely make him the first-ever trillionaire once SPCX stock begins trading, on paper at least.

At last check, Forbes had Elon Musk's net worth at $981.1 billion. We'll check this again at the end of the day.

The energy impact on orbital data centers

I'm still skeptical of orbital data centers technically working in a lot of ways. But the economics is an even bigger question. How the heck do you get the cost equivalent or better than Earth-based data centers?

I wrote a story about why AI dominance is measured by energy, and it's true AI models get better with more data, parameters and compute. That takes massive amounts of energy. There's no real sign that it's slowing, but in a decade, could there be some energy-efficient breakthrough? Or more efficient models? Or demand dies down? Seems possible and that would mess with orbital data center business models. They also require very low launch costs.

I read an interesting article that if Starship launched hourly, it would be a huge pollution issue. Because Starship is so enormous, it requires far bigger engines that create massive amounts of pollution. That's not an issue now with 10-20 heavy launches per year. But if you do 100s of heavy launches? I guess it could be an issue.

- John Miley

SpaceX stock opens above IPO price

SpaceX (SPCX) stock has officially begun trading on the Nasdaq, with shares opening at $150 per share, more than 11% above the IPO price.

At last check, shares were seen near $157 after hitting an intraday high of $162.98 (as of 11:55).

SpaceX IPO governance: why Elon Musk's control could become a bigger investor issue

The buzz surrounding the SpaceX IPO has focused mostly on the company's massive valuation, retail investor demand and the potential for one of the largest public offerings in market history. But there has been much less attention on a critical issue for investors: corporate governance.

Alon Kapen, a partner and corporate transactional lawyer at Farrell Fritz P.C., has reviewed SpaceX's S-1 and sees several provisions that stand out. Here's what he had to say:

What are some of the key governance issues?

I'd say the concentration of control is the major governance issue here. SpaceX's governance structure seems designed to ensure that Elon Musk retains authority over the company's strategic direction, even as public shareholders come in.

The mechanism for effectuating this level of control begins with SpaceX's dual-class share structure, in which Musk's Class B shares carry 10 votes each, versus one vote per Class A share sold to the public. The structure results in Musk controlling 85% of SpaceX's voting power despite holding only approximately 42% of its equity.

Also, Musk can only be removed from his roles as CEO, CTO and chairman by a vote of Class B shareholders, which he controls.

Another key governance issue is dispute resolution. SpaceX has adopted a mandatory binding arbitration clause for all shareholder disputes, and I believe it's the first major U.S. company to do so in a public offering. Shareholders must "irrevocably and unconditionally" waive the right to a jury trial and are prohibited from bringing class actions against the company or its directors, officers or controlling shareholders.

Finally, SpaceX reincorporated in 2024 from Delaware to Texas. Texas imposes greater procedural hurdles for initiating tender offers, proxy contests and shareholder proposals, making it more difficult for activists to wage activism campaigns such as removing directors or officers.

How does SpaceX's governance compare to other tech companies?

SpaceX's dual-class capital structure certainly fits within a broader pattern of founder-led companies where insiders retain supermajority control post-IPO. Think Facebook, Snap, Google and Tesla where dual-class shares preserve founder authority beyond an IPO. But unlike SpaceX, at least most of those companies had built in sunset provisions.

Might SpaceX's governance approach influence other companies? Or is this more of a special situation?

I think it's both. SpaceX is obviously a special situation. It has a national security dimension that arguably gives regulators reason to defer to management continuity. That makes it hard to generalize. But it could still reinforce an ongoing trend of founders pushing for dual-class structures and extending control post-IPO.

If SpaceX goes public with aggressive founder control preservation mechanisms and the stock performs well, it will be harder for investors to push back on the next company that tries it.

Ultimately, SpaceX can justify its structure because of its track record and unique positioning with governments. Without those factors, though, companies trying to duplicate their governance model would likely face significant investor pushback.

- Tom Taulli

Why history points to a rough road for SpaceX stock

The SpaceX IPO may be one of the most anticipated public offerings in years. But a recent Truist study offers a cautionary reminder: big-name IPOs often come with severe volatility. The study looked at 30 major IPOs and found that the average maximum drawdown in the first year was 55%. Even more striking, the best case still involved a 20% decline, while the worst fell 90%. While the average 12-month return was positive, the median return was negative.

This could be an ominous sign for early SpaceX investors. The company has enormous promise, but the hype is already intense. That alone can create a valuation that is difficult to sustain once the stock begins trading and investors start scrutinizing the numbers.

SpaceX is also a complicated business. It is not just a rocket company. It includes launch services, Starlink broadband, Starship development, an AI-related segment and even X (the social media platform formerly known as Twitter). Each has different risks, economics, capital needs and timelines. That complexity could make it harder for public investors to value the company, especially if one segment disappoints.

Then there is the lock-up issue. Many early employees, executives and investors are sitting on enormous gains. Once they are allowed to sell, the temptation to unload shares could be strong.

This does not mean SpaceX will fail as a public company. But it does suggest that the first year could be far more volatile than the launch-day excitement implies.

- Tom Taulli

Tesla trades lower as SpaceX stock soars

While SpaceX stock is higher in afternoon trading on Friday, Tesla (TSLA) shares were last seen in negative territory, down 0.2%.

Elon Musk's other publicly traded company has struggled on the price charts in recent months and is down more than 11% for the year to date.

But in the longer term, Tesla has been a strong performer. Over the past 15 years, for instance, the consumer discretionary stock has averaged an annual gain of 43%, outperforming the broader S&P 500 by more than 28 percentage points.

And Wall Street is generally upbeat on Tesla's outlook. Of the 47 analysts covering the stock who are tracked by S&P Global Market Intelligence, 23 say it's a Buy or Strong Buy, 18 have it at Hold and six rate it a Sell or Strong Sell. This works out to a consensus Buy recommendation.

Meanwhile, the average 12-month price target of $420.55 represents implied upside of nearly 6% to current levels.

- Karee Venema

SpaceX IPO mints one new trillionaire, thousands of new millionaires

Elon Musk is officially a trillionaire, on paper at least. With SpaceX stock trading near $165 per share at last check, Musk's net worth has swelled to $1.1 trillion, up $88.7 billion from yesterday.

However, Musk isn't the only person who has seen their net worth swell today. According to The New York Times, roughly 4,400 current and former SpaceX employees who held onto their early shares are poised to become millionaires in the aftermath of the blockbuster IPO.

And 400 of those people are expected to see their wealth jump past the $100 million marker.

- Karee Venema

What Wall Street is saying about the SpaceX IPO

There was no shortage of analyst notes released today about the SpaceX IPO. Here's a small sampling of what Wall Street has to say, edited at times for brevity:

"Everyone thinks of SpaceX as a rocket company. Increasingly, that’s the wrong lens. In a matter of months, SpaceX has become the world's largest and most profitable AI neocloud, and over the next year, that business will contribute more profits than launches or satellite internet." - Nicholas Anderson, portfolio manager at Thornburg Investment Management

"It's important to take some of the projections with a grain of salt. Elon has talked about a total addressable market of $28.5 trillion. Interestingly, the majority of that opportunity is tied to what is currently the company's cash incinerator — the AI segment of the business. We're also expecting a merger with Tesla in 2027 or 2028, so it's possible to envision a scenario in which not only the company's market capitalization, but also its revenue growth, becomes exponential. Right now, it's difficult to even quantify the potential scale." - Nancy Tengler, CEO and CIO at Laffer Tengler Investments

"This is not just an IPO — it's a major liquidity event for venture capital, with significant upside potential but elevated valuation, governance, and volatility risks." - Kaush Amin, Managing Director and Head of Private Market Investing at U.S. Bank Asset Management

"We have a negative outlook given dependence on unproven outcomes including Starship commercialization, orbital AI compute, and xAI monetization. While Starlink remains the strongest business, it faces risks from capacity expansion needs, regulatory approvals, and competition from terrestrial broadband and other LEO systems. We believe the market assigns too much value to future optionality and insufficient discount to execution risk." - Keith Snyder, Senior Equity Analyst at CFRA Research

"What's worth watching more closely is what comes after SpaceX. The upcoming IPO pipeline may look like a celebration of the AI boom, but looking at trader sentiment, it could have the makings of a late-cycle rush. As the company dominates commercial launch and Starlink continues to scale, analysts at New Street Research are already projecting 22% upside within 12 months of listing. The risks here aren't necessarily that SpaceX is a bad investment, but that a $1.77T entry point leaves very little margin for error, and that the retail enthusiasm surrounding it could produce the kind of volatility that shakes out investors before things play out in the long-term." - Stephen Callahan, Trading Behavior Analyst at Firstrade

- Karee Venema

SpaceX becomes the sixth largest U.S. company by market cap

At last check, SpaceX stock is trading near $170 per share, giving Elon Musk's space and exploration company a market valuation of $2.22 trillion. This makes SpaceX the sixth-biggest U.S. company by market cap, behind Nvidia (NVDA), Alphabet (GOOGL), Apple (AAPL), Microsoft (MSFT) and Amazon (AMZN).

Tesla (TSLA), Elon Musk's other publicly traded company, is the eighth-largest U.S. company by market cap, with a valuation of $1.51 trillion.

"SpaceX is not your typical mega-cap company," says Matt Britzman, senior equity analyst at Hargreaves Lansdown. "Investors are being asked to underwrite an investment case and product roadmap that stretches well beyond the time horizon for your typical trillion-dollar-club business."

Britzman adds that traditional valuation tools can help frame the debate on a stock, "but they only go so far when so much of the story depends on future breakthroughs, new markets and successful execution across several ambitious areas at once."

As such, he cautions that this creates both opportunity and risk, and "investors would do well to be mindful of both sides of that coin."

- Karee Venema

SpaceX enjoys a peaceful launch

The main equity indexes were mixed this morning, ahead of the debut of Elon Musk's SpaceX as a publicly traded company.

SpaceX (SPCX) started trading at about 11:45 am Eastern Standard Time and immediately popped 11.1% from its $135 offering price to $150. SPCX closed up 19.2% at $160.95, making Elon Musk the world's first trillionaire.

Meanwhile, all three main indexes rallied on firmer word of a potential agreement between the U.S. and Iran that would open the Strait of Hormuz.

By the closing bell, the blue-chip Dow Jones Industrial Average was up 0.7% at 51,202, the broad-based S&P 500 was higher by 0.5% at 7,431, and the tech-heavy Nasdaq Composite had added 0.3% at 25,888.

– David Dittman

Read more: Stocks Pop on SpaceX IPO, Hormuz Peace Plan: Stock Market Today

2026 could be the biggest year ever for initial public offerings (IPOs), with high-profile private companies SpaceX, Anthropic and Databricks among numerous super-sized upcoming IPOs expected to hit the markets over the coming months.

If you're a stock investor looking for fresh meat to sink your teeth into, 2026 is a veritable Fogo de Chão.

But even if most or all of your money is wrapped up in low-cost index funds and you have no real hunger for these shares, you still might be digesting a considerable slice of some of these and other potential mega-cap IPOs.

And depending on which funds you own, that day might be coming sooner rather than later.

How index funds pick stocks

Index investing is a simple concept. An index is a hypothetical portfolio of stocks built by a set of rules. And an index fund "tracks" that index by owning the same companies in the same weights as that index dictates.

But the rules can be complex and numerous — not just in niche indexes that carve up far-flung corners of the market, but even in ubiquitous indexes such as the S&P 500.

A common misconception is that the S&P 500 represents the 500 largest U.S. companies. Not so. It's 500 of the largest companies, all of which have met a much more exhaustive set of selection criteria than most people realize. Here's what the S&P 500 looks for in prospective components:

On that final point: the S&P 500 ultimately is not 100% governed by a set of rules. A selection committee ultimately makes calls on which stocks enter and exit the indexes.

Which stocks are eligible are determined by the rules, but the U.S. Index Committee can and does review those stocks, and can even make exceptions for stocks that otherwise wouldn't make the cut. This isn't specific to the S&P 500, either — this applies to a host of S&P Dow Jones indexes.

The U.S. Index Committee can also choose to revise index rules over time, so yesterday's rules might not necessarily apply tomorrow. For instance, they've raised the minimum market cap several times throughout the S&P 500's history.

Most other fund providers don't employ an individual-stock level of human review in their index funds. But they absolutely can use index rule changes to give them the flexibility they need to own mega-cap IPOs … and several have done just that ahead of the SpaceX IPO.

Will SpaceX be in your index fund? Well …

Elon Musk's SpaceX (SPCX) is expected to join the public markets later this week in what will likely be the biggest IPO ever. And many believe that its offering will value the aerospace manufacturing company at $1.75 trillion.

If the SpaceX IPO were most other offerings, we wouldn't expect it to show up in the low-cost funds in your portfolio for at least a couple of months. That's because many indexes have seasoning rules like the S&P 500's that prohibit companies from quickly joining.

This gives IPO companies time to meet liquidity and float thresholds. It also ensures index fund shareholders don't suffer if insiders sell shares in droves when the company's lockup period expires, which is usually 90 to 180 days after the IPO.

But most index providers have "fast-track" or "fast-entry" rules that allow them to waive that requirement, typically for massive IPOs where demand is expected to be high regardless of the risk.

"Fast-entry rules are important because they allow rules-based passive ETFs to keep pace with the market," says Tejas Dessai, director of Thematic Research at Global X, whose Global X NYSE 100 ETF (NYSX), a mega-cap fund, and Global X Space Tech ETF (ORBX), a space fund, have fast-track allowances. "When a major private company becomes public, investors should not necessarily have to wait months for that exposure to appear in a relevant ETF."

Importantly, SpaceX and other offerings would have to meet those indexes' other eligibility rules, Dessai says.

Among the major index makers with fast-track rules?

• Nasdaq recently changed its rules to allow IPOs to join an index as soon as 15 days after listing. That's expected to allow SpaceX to join the Nasdaq-100 Index — the largest 100 non-financial companies on the Nasdaq exchange. If so, owners of Invesco QQQ ETF (QQQ) and its smaller, more cost-effective cousin, Invesco Nasdaq 100 ETF (QQQM), would own a slice of SPCX.
• FTSE Russell updated its methodology to allow companies to join some of its indexes after just five trading days. Funds like the iShares Russell 1000 ETF (IWB) and iShares Russell 1000 Growth ETF (IWF), then, could add shares quickly.
• The Center for Research in Security Prices (CRSP), which already had fast-track rules in place, recently relaxed its float requirement, and new IPOs are eligible for inclusion after just five trading days. That puts the likes of Vanguard Total Stock Market Index Fund ETF (VTI) and Vanguard Growth ETF (VUG) into play.

But far more noteworthy is where S&P Dow Jones Indices didn't loosen up the rules: the S&P 500.

SpaceX is only making a sliver of its overall shares available in its public offering; its float is expected to be about 4% of shares outstanding, which is well below the S&P 500's threshold. SpaceX is also deeply unprofitable, posting a net loss of $4.3 billion during Q1 2026. Add in the 12-month IPO seasoning period, and that's a clear strikeout.

S&P Dow Jones Indices recently reviewed potential changes to several of its indices. It actually let through a few — it relaxed the float rules on a few products with fast-track allowances, most notably the S&P Total Market Index, which anchors the iShares Core S&P Total U.S. Stock Market ETF (ITOT).

However, it kept its float, profitability and seasoning criteria in place for the S&P 500, as well as the S&P MidCap 400, S&P SmallCap 600, and S&P Composite 1500.

That means if you hold any of the S&P 500 ETFs — Vanguard S&P 500 ETF (VOO), iShares Core S&P 500 ETF (IVV), State Street SPDR S&P 500 ETF Trust (SPY), State Street SPDR Portfolio S&P 500 ETF (SPYM) — you won't be holding any fraction of SpaceX stock for at least a year.

The same goes if you own S&P 500 tracking index mutual funds, or even funds that are indirectly tethered to the S&P 500, such as State Street's sector funds.

And we can expect similar fates for Anthropic, OpenAI and other mega-cap listings that are expected to offer small slivers of their total outstanding shares in their IPOs.

How much SpaceX am I about to own?

The good news — at least for anyone worried about the prospects of SpaceX taking over their portfolio — is that in many cases, SPCX might not enjoy a significant weight in your fund.

Not right away, anyway.

Again, SpaceX is expected to fetch a $1.75 trillion valuation. For perspective, $1.9 trillion chipmaker Broadcom (AVGO) is a top-10 holding in Vanguard's VTI, accounting for almost 3% of the index's weight. That's a massive amount of influence relative to all but a handful of VTI's 3,500 components — and by pure market cap alone, SpaceX would qualify for pretty similar treatment.

However, many index funds (including VTI) are "float-adjusted," which means weights aren't assigned based on total market cap, but the market cap based on the float.

So even though SpaceX would be a $1.75 trillion company, many index funds that include it would have to treat it like a $70 billion company. In Vanguard's total-market ETF, then, SPCX would enjoy a similar weight as $73 billion retailer Ross Stores (ROST) — currently the 157th-largest stock in VTI, accounting for about 0.1% of its assets.

That could change. Morningstar's Dan Lefkovitz points out that "by the end of the lockup period, it's typical for a company's free float to rise to 50% to 60% of its overall value. As the float increases, so will the stock's weighting in the indexes." Which means in a few months, your fund could end up owning a greater share of SPCX … even if the company's value shrinks.

And remember: Different funds have different weighting methodologies. So, whether you're concerned or excited about the prospect of owning SpaceX and/or other mega-cap IPOs in your index fund, now's a good reminder to go to the fund's provider page and look at its fact sheet and prospectus.

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SpaceX's S-1 filing is finally public, and for investors, the biggest mistake would be looking at this company as a rocket launcher.

That is not what SpaceX is anymore.

This is now a vertically integrated infrastructure company sitting at the center of space transportation, global communications, defense, artificial intelligence, compute, data transport and, potentially, chip manufacturing.

That is why the S-1 filing matters so much. It gives public market investors their first real look at a company that has been private for more than two decades and is now preparing for what could be the largest IPO in history.

The first thing I would tell investors is this: Do not get distracted by the headline valuation alone (about $1.75 trillion to $2 trillion, according to Reuters).

The real question is whether SpaceX is building the infrastructure layer for the next generation of the economy. In my opinion, that is the only way to evaluate this company.

Starlink is still the primary revenue driver

A lot of investors still think of SpaceX through the lens of launches. Falcon 9, Falcon Heavy and Starship get most of the attention because rockets are exciting. But from an investor perspective, Starlink remains one of the most important parts of the story.

The filing shows why. Starlink is not just a satellite internet product. It is global connectivity infrastructure. Residential broadband is one piece of it, but the bigger opportunity is much broader: Enterprise connectivity, government contracts, military communications through Starshield and, eventually, direct-to-cell service.

That last piece is important. SpaceX's spectrum strategy and direct-to-cell opportunity could eventually put the company in competition with wireless carriers such as AT&T, Verizon and T-Mobile.

It is still early, and investors should not assume that will happen overnight. But the direction is clear. SpaceX is not only trying to connect homes. It is trying to own the infrastructure that connects people, devices, governments and machines anywhere on Earth.

For ultra-high-net-worth investors, that is the point. The opportunity is not simply broadband revenue. The opportunity is platform control.

Governance will be a real concern for institutions

The filing also raises a governance issue that institutional investors will have to wrestle with. SpaceX is using a dual-class share structure, with Class A shares carrying one vote and Class B shares carrying 10 votes. Elon Musk is expected to retain voting control.

For many institutional investors, that is a red flag. They generally do not like one person having that much control over a public company.

I understand that concern. But I also think SpaceX is an unusual case. In a normal public company, this level of control might be a deal breaker. With SpaceX, the market may decide that access matters more than governance.

That does not mean investors should ignore the risk. They should price it in. Musk's control means investors are not just underwriting the business. They are underwriting his leadership, decision-making and long-term vision.

Personally, I prefer that he maintain control, because this is not a company that can be managed quarter to quarter. SpaceX is attempting projects that require long time horizons, massive capital investment and an unusually high tolerance for failure.

Old-school governance may not fit a company trying to build reusable rockets, orbital data centers and a Mars transportation system at the same time.

The xAI burn is big, but look at the compute revenue

The most obvious financial concern is capital intensity, especially around xAI. The filing shows just how expensive the AI side of the business is. The capital expenditures by xAI are massive, essentially running at a scale that looks like roughly a billion dollars a month.

That will scare some investors. I get it.

But the mistake would be looking only at the burn rate and ignoring the revenue opportunity that compute creates. The Anthropic compute agreement is one of the most important pieces of the filing. SpaceX is effectively monetizing Colossus compute capacity, and that deal generates roughly $1.25 billion per month through 2029.

That changes how investors should look at xAI. Yes, it is capital-intensive. But if the company can turn compute into recurring revenue, the story looks very different.

AI infrastructure is expensive for everyone. The question is who can lower the cost curve over time and control enough infrastructure to turn that spend into a durable business.

That is where SpaceX has a potential advantage.

Starship is the execution risk investors cannot ignore

Starship is crucial to the long-term thesis. If Falcon 9 made space more reusable, Starship could make space scalable.

That matters because almost every major future opportunity depends on lowering launch costs.

• More Starlink satellites
• Larger payloads
• Orbital data centers
• Moon infrastructure
• Mars
• Defense systems
• AI compute in space

Right now, the economics of space-based infrastructure depend heavily on the cost per kilogram to orbit. If SpaceX can bring that cost down meaningfully, the entire business model changes. If it cannot, many of the most ambitious opportunities remain theoretical.

That is why Starship execution is one of the biggest risks in the IPO filing. Investors should watch test flights, FAA approvals, launch cadence and reusability progress closely. A successful Starship program could accelerate nearly every segment of SpaceX. Delays or failures could slow the entire thesis.

The AI story is bigger than Grok

Retail investors may focus on Grok because it is the most visible part of xAI. I do not think that is the right way to look at it.

The bigger AI story is infrastructure: Compute, coding, data centers, chips and distribution. The potential Cursor deal matters because coding is one of the areas where xAI needs to compete more aggressively with Anthropic and OpenAI.

Terafab also matters because chip manufacturing and compute supply are becoming strategic necessities.

The companies that win AI will not just have the best chatbot. They will control the infrastructure that makes AI cheaper, faster and more scalable.

That is why orbital data centers are so important. They are still unproven at scale, and investors should treat them as a high-risk, high-upside part of the thesis. But if SpaceX can make space-based compute cheaper than Earth-based compute, it could change the economics of AI infrastructure entirely.

Unlimited solar power, fewer cooling constraints and no "not in my backyard" data center politics could become a serious advantage. The key word is "could." It still has to be proven.

The infrastructure thesis investors should understand

SpaceX is not being valued as a rocket company because it is no longer just a rocket company.

The filing makes that very clear. This is now a communications, transportation, AI and infrastructure company all under one roof.

Yes, there are risks.

• Starship still needs to execute
• AI remains extremely capital-intensive
• Regulatory approvals will matter
• Some institutional investors will likely remain uncomfortable with Musk's level of control

But in my opinion, many investors still are not fully understanding where this company is going. If SpaceX succeeds in scaling Starlink, lowering launch costs and building orbital infrastructure for AI and global connectivity, it becomes very difficult to see who can realistically compete with it.

That is why I believe the market will eventually look back at this IPO as far more than just another technology listing. It could end up being the moment investors realized SpaceX was building the infrastructure backbone for the next generation of the global economy.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

When Elon Musk took Tesla (TSLA) to market in June 2010, the electric vehicle maker raised more than $226 million in its initial public offering (IPO).

That pales in comparison with General Motors (GM), which raised roughly $20 billion in its November 2010 offering, when the automaker returned to the public markets after filing for Chapter 11 bankruptcy in 2009.

Tesla has grown into a trillion-dollar company and the biggest U.S. automaker by market capitalization. The stock has also averaged an annual return of 42% since it began trading, outpacing the broader S&P 500 by 31 percentage points.

Musk, however, has had his redemption on the IPO stage, with the entrepreneur taking SpaceX, his space exploration and satellite company, public in what is the biggest IPO ever.

What is SpaceX?

Elon Musk founded SpaceX in 2002, intending to lower costs for space launches and eventually build a livable colony on Mars. The company had its first successful space launch in 2008 and has since had more than 650 total launches. It also wants to build data centers in space.

"A key to its success has been a relentless focus on innovation," writes Kiplinger contributor Tom Taulli in his feature on the hottest upcoming IPOs to watch for. "The company's breakthroughs include reusable orbital rockets, which have greatly reduced the costs of space flights; vertical rocket landings; and onboard autonomous systems."

In 2015, SpaceX moved to diversify its revenue stream with Starlink, a satellite internet project that today provides coverage to roughly 10 million customers across 160 countries and territories. It also has contracts with the U.S. Department of Defense to provide satellite service through its Starshield segment to government and military organizations, including with Ukraine during its war with Russia.

Geopolitical conflicts are increasing the demand for satellites, and the conflict in the Middle East shows "how space tech is crucial for missile warning and tracking, communications, surveillance, drone and vehicle connectivity, and more," writes John Miley, senior associate editor at The Kiplinger Letter.

SpaceX also bought xAI, Musk's artificial intelligence (AI) company that owns X (formerly Twitter), in February 2026 in an all-stock deal valued at roughly $250 billion. In May, Musk announced that xAI is fully absorbed by SpaceX and will rebrand as SpaceXAI.

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According to its S-1 filing, which became publicly available on May 20, SpaceX had revenue of $4.7 billion in the three months ended March 31. It also incurred a loss from operations of $1.9 billion and had adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $1.1 billion.

In 2025, the company's revenue totaled $18.67 billion, while adjusted EBITDA arrived at $6.58 billion.

SpaceX is poised to benefit from surging growth in the global space economy, which is expected to reach $1 trillion by 2034, according to Novaspace, up from $626 billion in 2025. "The U.S., led by SpaceX launching 85% of spacecraft into orbit and its Starlink Internet service, reaps most of the business," says Miley.

When is the SpaceX IPO date?

SpaceX confidentially filed its IPO paperwork with the SEC in early April — and in late May, it filed its prospectus which revealed that Musk will own roughly 42% of the company's equity and control about 80% of the total voting power.

On Thursday, June 11, SpaceX confirmed a fixed per-share price of $135 ahead of its IPO and said it will sell 555.6 million shares. In its S-1 filing, the company said that 5% of common stock will be reserved for "certain employees and persons" to purchase at the offering price. And reports suggest roughly 20% was made available to retail investors, a higher-than-usual amount for IPOs.

At $135 per share, SpaceX raised $75 billion in its offering, making it the largest U.S. IPO ever, easily exceeding the previous record holder — Alibaba Group Holding (BABA) and its $21.8 billion offering in 2014. It also surpassed Saudi Aramco as the biggest global IPO ever.

The SpaceX IPO occurred on June 11, and SPCX stock made its market debut on the Nasdaq on June 12. Shares opened at $150, hit a session high of $176.52, and settled at $160.95.

SpaceX's market valuation at Friday's close was $2.105 trillion, making it the sixth-largest U.S. company by market cap.

Should you buy the SpaceX IPO?

"An initial public offering enables a private company to 'go public,' or start trading in public markets, by issuing its own shares on a stock exchange for the first time. In this way, any investor can buy shares and the company can raise capital to grow," Taulli writes in his article, "What Is an Initial Public Offering (IPO)?".

But buyer beware: IPOs can be volatile — especially for retail investors. In the "froth and frenzy, opportunities mix with peril," writes David Milstead, senior associate editor at the Kiplinger Personal Finance magazine. "The safest course may be to wait for companies to settle in some months after their debut, after one or two quarterly earnings reports."

Investors should also be aware of the Musk Effect, which refers to the impact Elon Musk's actions and commentary have had on Tesla — both on and off the price chart. As one example, Tesla's revenue and share price slumped in early 2025, in part because of backlash related to Musk's time at the Department of Government Efficiency (DOGE).

Another reason to possibly hold off on buying SpaceX stock is the Nasdaq's new "fast entry" rule that speeds the process of adding new companies to its Nasdaq-100 index.

"Under the new rules (PDF), which went into effect on May 1, newly public megacaps would be eligible for inclusion after just 15 trading days – and with only five days of prior market notice," writes Kiplinger contributor Dan Burrows.

Given that "a longer waiting period informs price discovery," Burrows explains, "it's fair to say passive investors won't be getting the best price" on these newly public companies.

The bottom line: Whether you buy the SpaceX IPO comes down to your own risk tolerance and personal investing goals. If you decide to buy shares of SpaceX stock when it first begins trading, do so in a small amount that you can afford to lose and have a trading plan in place.

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The market for initial public offerings (IPOs) got off to a slow start in 2026 amid private credit concerns, a broader risk-off backdrop and volatility sparked by the war in Iran.

Only 35 companies went public in the first three months of the year — the fewest in a quarter since Q1 2024. But while the actual number of IPOs was light, the amount raised was boosted by several sizable offerings, says Renaissance Capital. They include electrical equipment maker Forgent Power Solutions (FPS), which brought in more than $1 billion in its offering.

The second quarter has gotten off to a strong start, thanks in part to Bill Ackman's Pershing Square IPO, where the billionaire investor took his hedge fund and closed-end fund public in a rare dual offering.

Through May 13, there have been 93 IPOs filed so far in 2026, up 10.7% year over year. And the 57 offerings priced have raised $20.7 billion (+86.3% YoY).

And the next hot IPO just landed. Cerebras, which builds high-powered chips for complex artificial intelligence (AI) applications, began trading on May 14 after pricing its offering above the high end of its projected range.

What is Cerebras?

Cerebras bills itself as "the fastest AI infrastructure" firm. "For many workloads, Cerebras is up to 15 times faster than leading GPU-based solutions as benchmarked on leading open-source models," the company explains in its S-1 filing. "In some more exotic workloads, we have been more than 1,000 times faster."

In 2025, Cerebras had $510 million in total revenue, up 76% from 2024, and $237.8 million in net income vs a net loss of $481.6 million from the year prior.

So far in 2026, Cerebras has already inked multi-year deals with artificial intelligence giants OpenAI and Amazon Web Services. Its backers also include OpenAI's Sam Altman, Greg Brockman and Ilya Sutskever.

As for its IPO, the company priced its offering the evening of Wednesday, May 13, and began trading on Thursday, May 14, under the ticker symbol "CBRS."

Cerebras prices its IPO above its projected range

On Monday, May 11, Cerebras raised the per-share pricing for its offering to a range of $150 to $160, up from the estimate of $115 to $125 that it gave last week.

And on Wednesday, the company priced its IPO at $185 per share, above this upwardly revised range.

Based on the 30 million shares of common CBRS stock it offered, the AI company raised $5.55 billion in its offering, making it not only one of the biggest IPOs of the year but one of the largest U.S. IPOs ever. This also gives Cerebras a market valuation of more than $56 billion.

On Thursday, CBRS stock opened for trading at $350, hit an intraday high of $385 and closed at $311.07.

Should you buy the Cerebras IPO?

"An initial public offering enables a private company to 'go public,' or start trading in public markets, by issuing its own shares on a stock exchange for the first time. In this way, any investor can buy shares and the company can raise capital to grow," Taulli writes in his article, "What Is an Initial Public Offering (IPO)?".

But buyer beware: IPOs can be volatile – especially for retail investors. While new stocks will often have strong first-day showings, returns for the first year are generally weak, says the team of analysts at Trivariate Research, a market research firm based in New York.

"In this froth and frenzy, opportunities mix with peril," writes David Milstead, senior associate editor at the Kiplinger Personal Finance magazine. "The safest course may be to wait for companies to settle in some months after their debut, after one or two quarterly earnings reports."

As for retail investors, whether or not you buy the Cerebras IPO comes down to your own risk tolerance and personal investing goals. If you do decide to buy shares of CBRS stock when they first begin trading, do so in a small amount that you can afford to lose and have a trading plan in place.

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SpaceX and OpenAI are gearing up to go public in what would be the biggest initial public offerings (IPOs) of all time, and Nasdaq (NDAQ) can hardly wait.

The exchange operator rolled out new "fast entry" rules that will allow it to speed up the process of adding such massive companies to its flagship Nasdaq-100 index. Ordinarily, it can take up to a year for a mega-cap stock to be included in the Nasdaq-100.

Under the new rules (PDF), which went into effect on May 1, newly public mega caps would be eligible for inclusion after just 15 trading days – and with only five days of prior market notice.

That's important for a number of reasons. The Nasdaq-100, which comprises the 100 largest non-financial companies in the Nasdaq Composite, is tracked by exchange-traded funds with more than $800 billion in assets. A longer waiting period informs price discovery.

For one thing, the delay stops hedge funds from front-running ETF investors. Under the new rules, hedge funds could buy the stock on the day of the IPO, then flip it to passive investors just 15 days later. That's basically a wealth transfer from long-term index investors to fast-money pros.

Another issue: when a company is added to an index, institutional buyers are forced to buy shares. The Invesco QQQ Trust (QQQ), the largest Nasdaq-100 ETF with $430 billion in assets under management (AUM), will have no choice but to buy these newly issued stocks just two weeks after they go public.

With shares still riding the post-IPO pop, it's fair to say passive investors won't be getting the best price.

Let's not forget insiders, who under the old rules had a 90- to 180-day lockup period. Under the new rules, they could sell when the stock is artificially propped up by forced buying.

Put it all together, and research shows that the fast entry process could allow newly public companies to raise 6% more capital – and that capital would come at the expense of index investors.

SpaceX is targeting an IPO in June, with a valuation from $1.75 trillion to $2 trillion. OpenAI, which could go public as soon as the fourth quarter of 2026, is valued at more than $850 billion. With those sorts of eye-watering figures, you can see why so many voices are crying foul.

"This is the most shameless structural manipulation of a major index I've ever seen," writes George Noble, chief investment officer of Noble Capital Advisors. "Indexing used to be brilliant because you were free-riding on the price discovery of active managers. Now, the index is the market."

When trillions of dollars flow blindly into whatever the rules dictate, "your 401(k) is the exit liquidity. This is the fundamental corruption of indexing," he adds.

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The market for initial public offerings (IPOs) got off to a slow start in 2026, with the pipeline pressured by broad risk-off sentiment, skittishness around all things artificial intelligence (AI) and geopolitical uncertainty.

But things appear to be picking up. According to Renaissance Capital, 81 IPOs have been filed this year through April 29, up more than 5% from the year prior. However, 46 offerings have been priced, a 33% drop from 2025.

The IPO market regained its footing in 2025, but it's still far from the levels seen in 2021, says Kaush Amin, head of private market investing at U.S. Bank.

"If the Iran conflict resolves in the near term with oil flow resuming to prior levels and earnings continue to deliver," Amin explains, "conditions are in place for a faster pace in 2026." What will matter most, he adds, "is pricing discipline and deal quality."

Looking ahead, there are several large private companies listed among the hottest upcoming IPOs this year — one just made its long-awaited market debut.

On April 29, Bill Ackman's Pershing Square USA, a closed-end fund that invests in a dozen or so large public companies, began trading. He also took Pershing Square, his hedge fund firm, public in a "combined IPO."

How did the Pershing Square IPO perform?

On April 13, Ackman announced that he had kicked off the roadshow for the combined Pershing Square IPO. The general purpose of the roadshow was to generate interest and build momentum.

Pershing Square USA is listed on the New York Stock Exchange (NYSE) and trades under the ticker "PSUS." The shares were priced at $50 each in the offering, but opened well below here on April 29, at $42. Shares closed the session at $40.90.

As part of the "combined offering," Ackman simultaneously took his hedge fund firm public. Pershing Square also trades on the NYSE under the ticker symbol "PS." The two securities were taken public simultaneously but trade separately.

PS shares opened at $24 on April 29 and closed at $24.20.

To participate in the PSUS IPO, investors had to buy at least 100 shares of the closed-end fund in its offering, which works out to a minimum initial investment of $5,000. They received 20 shares of PSI stock for every 100 shares of PSUS purchased in its IPO at no additional cost.

Pershing also said that, leading up to the market debut, it had commitments from private placement investors, including family offices, pension funds and ultra-high-net-worth investors, who received 30 shares of PSI stock for every 100 shares of PSUS they purchased.

According to the S-1 filing, individual trading of each security — meaning investors can buy and sell shares of PSUS and PS on a separate basis — "will begin the first trading day following the pricing of the PSUS IPO."

This isn't the first time Ackman has attempted to take the closed-end fund public. In 2024, the billionaire investor withdrew plans for a Pershing Square USA IPO in order "to reevaluate PSUS's structure."

The PSUS offering in mid-2024 sought to raise $2 billion, well below a prior target of $25 billion. This time around, Ackman sought an offering size from $5 billion to $10 billion, which included $2.8 billion in private commitments.

Ackman raised in $5 billion in the PSUS offering, making it one of the biggest IPOs of the year.

What is a closed-end fund?

A closed-end fund (CEF) is an investment company that raises capital through an IPO. Unlike a mutual fund or an exchange-traded fund (ETF), a CEF offers a fixed number of shares at inception.

"Because there is no ongoing creation or redemption mechanism, CEFs can trade at prices that diverge materially from NAV," writes Kiplinger contributor Tony Dong in his feature on the best closed-end funds to buy. "For example, a CEF with $15 per share in underlying assets may trade at $17 if demand is strong, or at $13 if investor interest is weak."

Dong adds that the structure of CEFs gives "managers more flexibility to own less liquid assets such as private credit or private equity."

The investment strategy for Pershing Square USA, according to the SEC filing, is to acquire "long-term, large minority stakes in 12 to 15 high-quality, predominantly North American-listed, large-capitalization growth companies at attractive valuations during periods in which the manager believes they have underperformed their potential and/or when the manager believes they are undervalued because the market underestimates their potential or overestimates the impact of certain negative factors on their businesses."

The filing also states that management will complement its core strategy using options and credit default swaps.

Should you buy the PSUS IPO?

"An initial public offering enables a private company to 'go public,' or start trading in public markets, by issuing its own shares on a stock exchange for the first time. In this way, any investor can buy shares and the company can raise capital to grow," Kiplinger contributing writer Tom Taulli writes in his article, "What Is an Initial Public Offering (IPO)?".

But buyer beware: IPOs can be volatile — especially for retail investors. In the "froth and frenzy, opportunities mix with peril," writes David Milstead, senior associate editor at the "Kiplinger Personal Finance" magazine. "The safest course may be to wait for companies to settle in some months after their debut, after one or two quarterly earnings reports."

U.S. Bank's Amin reminds us that the Pershing Square IPO "is unusual" because of its combined offering for a closed-end fund and an equity stake in the hedge fund company.

"Investors should make sure they understand what they own, how the fund structure works, and how market price can deviate from underlying value in closed‑end vehicles," he advises.

As for PS stock, Pershing shares a boilerplate warning in its S-1 filing: "No public market for our common stock currently exists, and an active trading market for our common stock may never develop or be sustained after the combined offering. Following the combined offering, our stock price may fluctuate significantly."

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The market for initial public offerings (IPOs) was gaining momentum heading into the fourth quarter (Q4) of 2025, but quickly lost steam as the record-long government shutdown put a short-term halt to public offerings.

According to Renaissance Capital, the 64 IPOs we saw in Q3 raised a combined $15.3 billion, marking the biggest quarter of new issuance since 2021.

"Twenty-four IPOs raised $100 million or more, another post-2021 high, led by a wave of high-profile unicorns," wrote Renaissance Capital in its Q3 2025 Quarterly Review (PDF). "Renewed interest in growth stocks allowed many of these names to price above the midpoint, and while a few of the earlier IPOs had explosive debuts, like billion-dollar deal Figma's historic 250% pop, more rational appetite prevailed towards quarter end."

But October saw just 22 new listings, and November had half that, with the 33 total offerings raising a combined $5.5 billion.

While Renaissance Capital didn't expect a rush of offerings through year's end "due to a backlogged SEC, pressure on AI and other tech stocks and the approaching holiday slowdown," there were a few notable names that made their market debut before the new year.

Among them was medical supplies company Medline, whose deal size of $6.26 billion makes it the biggest IPO since Rivian Automotive (RIVN) raised $11.9 billion in its 2021 offering.

When is the Medline IPO?

In late October, Medline announced that it had filed its IPO paperwork with the Securities and Exchange Commission (SEC). The company updated its filing on December 8, saying it will sell 179 million shares and expects them to be priced from $26 to $30 apiece. And on Tuesday, December 16, Medline increased the size of its offering to 216 million shares, which were priced at $29 apiece.

Medline shares began trading December 17, with the stock listed on the Nasdaq Global Select Market under the ticker symbol "MDLN."

MDLN stock opened the day at $35, nearly 21% above the IPO price. Shares hit an intraday high of $41.25 before settling just south of here at $41.

Who owns Medline?

Medline previously traded on the public markets in the mid-1970s, but was taken private by Jim and Jon Mills, who founded the company in 1966.

In 2021, a group of private equity firms — Blackstone, Carlyle and Hellman & Friedman — acquired a majority stake in Medline for roughly $30 billion, in what was then the largest leveraged buyout since 2008.

According to the company's regulatory filing, Medline currently operates 22 manufacturing facilities and 69 distribution centers across more than 100 countries. It employs 43,000 folks worldwide.

Its growth is impressive, too. The company has enjoyed more than 50 straight years of annual net sales growth. In 2024, Medline generated net sales of $25.5 billion, up 10% from the year prior. In the first six months of 2025, net sales rose 9.8% to $13.5 billion.

Can I buy MDLN stock?

"An initial public offering enables a private company to 'go public,' or start trading in public markets, by issuing its own shares on a stock exchange for the first time. In this way, any investor can buy shares and the company can raise capital to grow," Kiplinger contributing writer Tom Taulli writes in his article, "What Is an Initial Public Offering (IPO)?".

But buyer beware: IPOs can be volatile — especially for retail investors. While new stocks tend to have strong first-day showings, returns for the first year are generally weak, says the team of analysts at Trivariate Research, a market research firm based in New York.

"In this froth and frenzy, opportunities mix with peril," writes David Milstead, senior associate editor at the Kiplinger Personal Finance magazine. "The safest course may be to wait for companies to settle in some months after their debut, after one or two quarterly earnings reports."

Ultimately, the decision to buy the Medline IPO comes down to your own risk tolerance and personal investing goals. If you choose to buy shares of MDLN stock when they first begin trading, it's prudent to do so in a small amount that you can afford to lose and have a trading plan in place.

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With stock markets hitting highs and a flood of new companies selling their shares to investors, it's easy to get FOMOIPO — fear of missing out on initial public offerings. But the fortunes of many of the debuts in this year's surge are tied to artificial intelligence (AI) or cryptocurrency, making the batch of new issues perhaps even riskier than the typical crop.

Through September 30, there were 161 U.S. IPOs, according to IPO research firm Renaissance Capital, compared with 150 for the entirety of 2024. Renaissance counted 64 IPOs in the third quarter, raising a combined $15.3 billion—the biggest quarter for new issuance since 2021.

One of 2025's top-performing IPOs has been CoreWeave (CRWV), which operates a cloud platform for artificial intelligence computing. Priced at $40 per share at its March IPO, it closed out September at $137, giving it a market capitalization of $71 billion. Circle Internet Group (CRCL), a trading platform for bitcoin and an issuer of a stablecoin (a type of cryptocurrency pegged to the U.S. dollar), was priced at $31 in June and is now $133, giving it a market value of $30 billion.

Both are unprofitable, according to S&P Global Market Intelligence. (Prices, returns and other data are as of September 30, unless otherwise noted.)

"The IPO market tends to be a lot busier in periods when asset prices may be somewhat inflated, toward the top of a market cycle," says Nick Einhorn, the director of research at Renaissance. The "danger," he says, is that when the cycle turns, IPO stocks can fall sharply.

IPOs have always been risky because the companies are typically younger or less established than those already trading on the stock exchange, and IPOs don't have a track record of delivering results to a broad shareholder base.

A go-to exit strategy

IPOs originated hundreds of years ago as a way for companies to raise capital to expand their business — especially needed in an industrial economy that required property, manufacturing plants and equipment.

The market has evolved over time, particularly in the final decades of the 20th century, when the U.S. economy shifted and became dominated by technology companies. Today, raising capital is sometimes secondary to giving early owners a way to exit their investments profitably or providing a way for employees compensated with stock to easily know what their shares are worth.

For many companies, a big part of the IPO story is the buildup to its first day of trading with individual investors — and whether the shares will "pop," producing a big return. Einhorn says the average first-day return for IPOs of $100 million or larger so far in 2025 has been 27%, compared with 16% in 2024.

In this froth and frenzy, opportunities mix with peril. The safest course may be to wait for companies to settle in some months after their debut, after one or two quarterly earnings reports.

Investors should also know when a company's "lock-up period" ends. This is a window, typically 90 to 180 days from the IPO, when company insiders cannot sell their stock. IPO investors can typically expect some selling pressure when it expires.

Jay Ritter, a University of Florida finance professor with a longtime specialty in IPOs, says his work suggests investors look to more mature companies, which he defines as having at least $100 million in revenue when they come public.

According to S&P Global Market Intelligence, 42 of the companies with IPOs this year make the cut, including curriculum provider McGraw Hill (MH) and online ticket reseller StubHub Holdings (STUB). Ritter says he has found "a pretty strong pattern" that the mature companies, on average, do as well as the broader market, while less-mature companies "all too often struggle."

Investors interested in IPO stocks should consider valuation measures — particularly price-to-sales ratios, for unprofitable companies — and generally use all the typical methods they use to pick investments, says Ritter. "Don't think of it as an IPO or recent IPO, think of it as a stock, whether it has been traded for three months or 30 years."

Consider the old guard

Not all of 2025's biggest IPOs fall into edgy, trendy categories, and a couple of newbies that might be worth exploring, analysts say, are a little more old school.

Venture Global (VG) pursued an IPO because it needed capital to continue an ambitious plan, launched in 2022, to produce, refine and sell liquefied natural gas from the U.S. Gulf Coast. The company has chosen so far to sell at market prices rather than use long-term contracts for revenue certainty. With $31 billion in debt, it has little margin for error.

That risk may be priced in, however, because the shares, which went public in January at $24, are now at $14, trading for less than 10 times estimated earnings for the next 12 months. Analyst Manav Gupta, of investment firm UBS, in August boosted his rating on the energy stock from Neutral to Buy, with a 12-month price target for the shares of $18.

Pork producer Smithfield Foods (SFD) was a public company until its Chinese parent, WH Group, took it private in 2013. WH Group decided to bring it back to public markets in January by selling 13% of the company at $20 a share. Analysts expect earnings per share of $2.35 in 2025 and $2.39 in 2026, up from $1.88 in 2024. The stock's price-to-earnings (P/E) ratio is under 10.

Six of the seven analysts who cover the consumer staples stock have a Buy rating, with an average 12-month target price that suggests a 25% gain from its recent close.

If getting in on the ground floor of brand-new companies is something you want to gamble on, limit your investment to no more than you can lose. You can diversify the risk by choosing an exchange-traded fund, but be forewarned that the ride can be bumpy.

Renaissance Capital's Renaissance IPO (IPO) adds new IPO stocks once per quarter, removing any that have traded for more than three years. The average age of the 31 stocks in the fund is 1.3 years, and it has less than 1% overlap with the S&P 500.

In 2025, it's up 14.5%, roughly even with the 14.8% gain for the S&P benchmark index and ahead of the 10.4% return for the Russell 2000, a popular small-stock index. In the past 10 years, the ETF has been in the top 5% of its category (mid-cap growth funds) three times, but in the bottom 10% five times. On the plus side, its expense ratio of 0.60% puts it among the cheapest 20% of funds in the category.

The First Trust US Equity Opportunities ETF (FPX) is a bit less volatile and has a similar expense ratio, at 0.61%. The fund seeks to replicate the IPOX-100 U.S. index of large, liquid IPOs, which IPOX says captures about 85% of the total market capitalization of IPOs in the previous four years. The ETF is up 39.3% so far in 2025.

Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.

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The market for initial public offerings (IPOs) has been red-hot in recent months, bouncing back after a spring freeze sparked by uncertainty about President Donald Trump's tariff policies.

In the third quarter, there were 64 IPOs that raised a combined $15.3 billion. According to Renaissance Capital, this marked the biggest quarter for new offerings since 2021.

"IPOs delayed by earlier macro headwinds were revived or even accelerated to take advantage of surging demand for new issues, resulting in a steady pickup through July, a more-active-than-usual August and more robust deal flow in September," wrote Renaissance Capital in its third-quarter (Q3) review (PDF).

Some of the more notable offerings we've seen this year include Peter Thiel-backed crypto company Bullish (BLSH) and design software firm Figma (FIG), which both raised more than $1 billion in their offerings. (Each stock has since fizzled since their impressive market debuts, though.)

October started off strong, too. Fermi (FRMI), a Texas-based company with big plans to build data centers, raised $683 million in its September 30 upsized offering, and shares surged 55% in their October 1 market debut.

Momentum could come to a grinding halt if the government shutdown, which began at 12:01 am Eastern Time on Wednesday, October 1, doesn't come to a quick resolution.

Why would the government shutdown impact the IPO market?

Companies seeking to go public must file paperwork with the Securities and Exchange Commission (SEC).

"The S-1 (PDF) includes the prospectus, with key details of how the company will operate, such as the business plan, risk factors, audited financials, management team bios, compensation and so on," writes Kiplinger contributor Tom Taulli in his explainer, "What Is an Initial Public Offering (IPO)?"

The SEC then reviews the S-1 and "may request that certain changes be made. These changes will become part of an amended S-1, which will also be published on EDGAR. There will often be several of these filings."

But the SEC is only running essential functions during the government shutdown, with a low staff. While EDGAR will remain operational, allowing companies to make filings as they normally would, "staff reviewing the filings will be furloughed, and any function that requires review from a member of the staff will not occur," said the SEC in its government shutdown guidance.

The agency added that those firms "with pending comments from the SEC staff on their filings may respond to those comments, but SEC staff will not reply until normal operations resume."

While a lengthy shutdown certainly creates a speed bump for an IPO market that has been barreling full steam ahead in recent months, it's likely to be a temporary one.

"With a solid quarter of activity behind us and more deals lining up in the pipeline, the long-awaited IPO pickup appears to be well underway, and solid returns, stable market conditions, and a robust private backlog bolster a strong outlook for the rest of the year, provided that the government shutdown is resolved quickly," says Renaissance Capital.

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The post-Labor Day initial public offering (IPO) market is heating up, with Renaissance Capital citing "clarity on trade policy, a summer rally in growth stocks, and the prospect of rate cuts" as the catalysts behind the much-anticipated rebound.

"Heading into the fall season, we expect the fastest pace of deal activity since 2021, as more companies accelerate listing plans amid the current momentum," the IPO experts say in their fall 2025 U.S. IPO preview (PDF).

Last week, for instance, there were seven large deals, including a more than $1 billion offering from buy now, pay later firm Klarna (KLAR). And Renaissance Capital expects a total of 40 to 60 "sizable IPOs by year-end."

Among them is StubHub (STUB), which has been one of the most-anticipated upcoming IPOs of 2025.

When is the StubHub IPO?

In August, the online ticket marketplace refiled its IPO paperwork after pausing efforts this spring amid uncertainty surrounding President Donald Trump's tariff policies.

And on Tuesday, September 16, StubHub priced its public offering at $23.50 per share, in the middle of its previously announced range of $22 to $25.

Based on the roughly 34 million shares it made available, StubHub raised $800 million in the offering, making it one of the biggest IPOs of the year.

This also puts its valuation at $8.6 billion, although this is below the $16.5 billion valuation it received during a late-2021 round of funding.

As for its first day of trading, STUB stock opened at $25.35, hit an intraday high of $26.34, and closed at $22.00.

It ended the day with a market valuation of $7.5 billion.

How profitable is StubHub?

According to StubHub's updated IPO prospectus, the company had gross merchandise sales, or the total dollar value paid by buyers for ticket transactions and fulfillment, of $8.7 billion in 2024. This was 27% higher than the year prior.

It also sold more than 40 million tickets and had north of 1 million unique sellers.

In the first half of 2025, StubHub's revenue was up 3% year over year to $827.9 million. Its net loss, meanwhile, widened to $76 million from $24 million in the first half of 2024.

Should I buy the StubHub IPO?

"An initial public offering enables a private company to 'go public,' or start trading in public markets, by issuing its own shares on a stock exchange for the first time. In this way, any investor can buy shares and the company can raise capital to grow," Kiplinger contributing writer Tom Taulli writes in his article, "What Is an Initial Public Offering (IPO)?".

And first-day performance for IPOs in 2025 has been strong, says the team of analysts at Trivariate Research, a market research firm based in New York, with the average Day 1 return of 26% for new stocks this year the highest since 2020.

But buyer beware. IPOs can be extremely volatile, and as Trivariate Research notes, "while first day returns were on average strong for IPOs, returns after the first day for the first year were generally weak."

Ultimately, the decision to buy the StubHub IPO comes down to your own risk tolerance and personal investing goals. If you do choose to buy shares of STUB stock when they first begin trading, it's prudent to do so in a small amount that you can afford to lose and have a trading plan in place.

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In a recent forecast of activity in the initial public offering (IPO) market, Renaissance Capital said a "long-awaited … rebound is here."

A spring freeze sparked by uncertainty about President Donald Trump's aggressive tariff policies quickly thawed over the summer with successful offerings from names such as crypto company Bullish (BLSH) and design software company Figma (FIG), which raised $1.1 billion and $1.2 billion, respectively.

Overall, there have been 144 IPOs priced in 2025 through September 10, up more than 53% from the year prior. Total proceeds raised from these filings are at $24 billion, up 3.1% from the year-ago period.

"Heading into the fall season, we expect the fastest pace of deal activity since 2021, as more companies accelerate listing plans amid the current momentum," says Renaissance Capital in its fall 2025 U.S. IPO preview (PDF).

The IPO experts go on to say that, "While recent enthusiasm has centered around high-growth industries like tech, fintech, AI and crypto, the IPO backlog comprises a wealth of different sectors, featuring biotechs, restaurants, banks and energy companies."

Among the most notable companies to finally go public is Swedish buy now, pay later firm Klarna (KLAR), which began trading on September 10 after pausing its IPO plans earlier this year.

On September 2, Klarna noted its intention to sell roughly 34.3 million shares from $35 to $37 apiece. And then on September 9, the company officially priced its IPO above this initial range, at $40 per share, raising $1.37 billion in its offering — which makes it one of the biggest IPOs of the year.

Klarna's prospectus also indicates that its Class B shares, which are only available to current stakeholders such as co-founder and CEO Sebastian Siemiatkowski and venture capital firm Sequoia, will be entitled to 10 votes per share, while its common stock will account for one vote each.

How much is Klarna worth?

Klarna's offering price put its valuation around $15 billion. And after its first-day performance, which saw KLAR stock open at $52, hit an intraday high of $57.20 and close at $45.82, its market cap was north of $17.3 billion.

Still, this is a far cry from June 2021, when its valuation hit $45.6 billion in a funding round led by SoftBank.

But Phil Haslett, co-founder and chief strategy officer at Equityzen says KLAR's market debut "is actually the ideal scenario for a company: a modest uplift on day one signals the offering was priced correctly and that there's genuine excitement for the business. Overall, it looks like a solid start."

Should you buy the Klarna IPO?

"An initial public offering enables a private company to 'go public,' or start trading in public markets, by issuing its own shares on a stock exchange for the first time. In this way, any investor can buy shares and the company can raise capital to grow," Kiplinger contributing writer Tom Taulli writes in his article, "What Is an Initial Public Offering (IPO)?".

But buyer beware: IPOs can be volatile — especially for retail investors. While new stocks tend to have strong first-day showings, returns for the first year are generally weak, says the team of analysts at Trivariate Research, a market research firm based in New York.

As for retail investors, whether or not you buy the Klarna shares comes down to your own risk tolerance and personal investing goals. If you do decide to buy KLAR stock in these first few weeks after its IPO, do so in a small amount that you can afford to lose and have a trading plan in place.

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Activity in the initial public offering (IPO) market is accelerating following a slowdown this spring. According to Renaissance Capital, there have been 133 IPOs priced this year through August 13, a 58% increase from the year prior.

Total proceeds from this year's filings are down 4% year over year to $22.2 billion.

This year's biggest IPOs include stablecoin issuer Circle Internet Group (CRCL) and Figma (FIG), a design software company, which raised $1.05 billion and $1.2 billion, respectively, in their offerings.

And following in the footsteps of these successful offerings is Bullish, a Peter Thiel-backed cryptocurrency exchange and owner of CoinDesk, which began trading on August 13 on the New York Stock Exchange under the ticker symbol "BLSH."

The company's objective, according to its prospectus, is "to provide mission critical products and services that are designed to help institutions grow their businesses, empower individual customers, and drive the adoption of stablecoins, digital assets, and blockchain technology."

How much is the Bullish IPO worth?

Bullish priced its offering at $37 per share on August 12, above the previous range of $32 to $33 per share. This gives the company a market value of $5.4 billion.

And based on the 30 million shares it said it will sell in its offering, Bullish raised $1.1 billion in its IPO. The company also said in its regulatory filing that its underwriters, which include JPMorgan, Jefferies and Citigroup, have the option to sell an additional 4.5 million shares over the next 30 days.

High-profile asset management firms BlackRock and Ark Investment Management have shown interest in accumulating a notable stake in BLSH stock.

As for its market debut, shares opened today at $90, hit an intraday high of $118, and settled at $68.

Should you buy BLSH stock?

"An initial public offering enables a private company to 'go public,' or start trading in public markets, by issuing its own shares on a stock exchange for the first time. In this way, any investor can buy shares and the company can raise capital to grow," Taulli writes in his article, "What Is an Initial Public Offering (IPO)?".

And while recent IPOs have displayed powerful momentum trading, says Bill Smith, CEO and founder of Renaissance Capital, it's important for folks to know the difference between good fear of missing out (FOMO) and bad FOMO when it comes to new offerings.

Good FOMO, he writes, is "keeping new stocks in your portfolio to access unique growth opportunities not found in major ETFs." And bad FOMO, Smith says, is "paying any price to get the latest hot IPO, now."

Smith adds that experienced IPO investors tend to have a "healthy amount of Good FOMO across market cycles," and are able to "keep their emotions in check, know that volatility is not risk, and use risk controls like stop-losses."

But newbies, he warns will often "get burned by Bad FOMO in a hot market, and ignore Good FOMO in a slower market."

For retail investors, whether or not you buy the Bullish IPO comes down to your own risk tolerance and personal investing goals. If you do decide to buy shares of BLSH stock when they first begin trading, do so in a small amount that you can afford to lose and have a trading plan in place.

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Activity in the initial public offering (IPO) market is accelerating following a spring freeze. According to Renaissance Capital, there have been 123 IPOs priced this year through July 31, a 48% increase from the year prior.

Total proceeds from this year's filings are down 15% year over year to $19.7 billion.

This year's biggest IPOs include stablecoin issuer Circle Internet Group (CRCL) and CoreWeave (CRWV), an artificial intelligence (AI) cloud company, which raised $1.05 billion and $1.5 billion, respectively, in their offerings.

And following in the footsteps of these successful offerings is Figma (FIG), a design software company and former Adobe (ADBE) acquisition target, which had its own blowout market debut on July 31.

After pricing its offering at $33 per share on July 31, well above its initial range of $25 to $28 per share and its upwardly revised range of $30 to $32 per share, Figma raised $1.2 billion in its IPO.

Shares of Figma, which trade on the New York Stock Exchange, opened on Thursday at $85 per share. They hit an intraday high of $124.63, before closing at $115.50.

"Investor demand for Figma has proven to be incredibly strong, with shares reportedly oversubscribed by more than 30 times," says Greg Martin, managing director at Rainmaker Securities.

This elevated demand for the shares "suggests long-term confidence in Figma and a view that their independence in the wake of the Abode deal collapse was ultimately beneficial, allowing Figma to accelerate their AI innovation while expanding their product line," Martin adds.

Preliminary results for Figma's second quarter show a 40% year-over-year rise in revenue at the midpoint of its expected range.

It also expects non-GAAP operating income to arrive between $9 million and $12 million vs $4.9 million in the year-ago period.

In Q1, the company saw revenue jumped 46% year over year and generated net income of $44.9 million. As of March 31, it had 13 million active monthly users, and 95% of Fortune 500 companies are customers.

What is Figma's valuation?

In 2022, blue chip stock Adobe agreed to buy Figma for $20 billion, but the acquisition was called off as regulators in the U.K. expressed antitrust concerns.

Shortly after the deal fell through in late 2023, Figma reset its internal valuation to $10 billion.

Based on its offering price of $33 per share, Figma's IPO valued the company at roughly $19.3 billion. However, the FIG finished Thursday with a market cap of $47.1 billion, putting it in the same neighborhood as fintech Block (XYZ).

Should you buy FIG stock?

"An initial public offering enables a private company to 'go public,' or start trading in public markets, by issuing its own shares on a stock exchange for the first time. In this way, any investor can buy shares and the company can raise capital to grow," Taulli writes in his article, "What Is an Initial Public Offering (IPO)?".

While IPO stocks tend to have strong first-day showings, returns for the first year are generally weak, says the team of analysts at Trivariate Research, a market research firm based in New York.

As for retail investors, whether or not you buy the Figma IPO comes down to your own risk tolerance and personal investing goals. If you do decide to buy shares of FIG stock when they first begin trading, do so in a small amount that you can afford to lose and have a trading plan in place.

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The market for initial public offerings (IPOs) looked as if it was finally gaining momentum in late March, but things quickly cooled as President Donald Trump's shifting tariff policies sparked uncertainty across Wall Street.

According to Renaissance Capital, there have been 88 IPOs priced so far this year through June 12, up 40% from the year prior.

However, the total proceeds raised from these offerings are $14.4 billion, down nearly 7% year over year.

But a blowout offering from stablecoin issuer Circle Internet Group (CRCL) and an impressive market debut from Chime Financial (CHYM) suggests the temporary freeze in public offerings is thawing.

Chime, which filed its IPO paperwork in mid-May, began trading on June 12 on the Nasdaq Composite, and market participants were hot to get a piece of the pie.

Last night, the fintech priced its offering at $27 per share, above the high end of its initial range of $24 to $26 per share, raising $865 million for the fintech and making it one of the biggest IPOs of the year.

The stock opened today at $43 and hit an intraday high of $44.94 before settling at $37.11. It's market capitalization now stands at $12.3 billion.

What is Chime?

Chime, which calls itself "a technology company, not a bank," was founded in 2012.

The company was created "to disrupt the traditional banking industry," which "was too expensive" and "failed to serve younger and lower-income people," writes Kiplinger contributor Tom Taulli in his feature on the hottest upcoming IPOs.

The goal of the mobile banking app "was to reduce and even eliminate fees for things such as minimum balances and overdrafts," Taulli says, and offer "competitive interest rates on deposit balances as well as credit cards."

Its target audience is "everyday Americans" who earn up to $100,000 annually, and the average age of its customers is 36.

How much is Chime worth?

The formula has paid off for Chime. According to its mid-May prospectus, the company had 8.6 million members as of March 31 and has seen 82% active member growth since the first quarter (Q1) of 2022.

The company also experienced year-over-year revenue growth of 32% in the first quarter and averaged $251 in revenue per active member. Its gross margin was 88%, unchanged from Q1 2024.

Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) — a key earnings metric — climbed 62% to $25.1 million.

Should you buy the Chime IPO?

"An initial public offering enables a private company to 'go public,' or start trading in public markets, by issuing its own shares on a stock exchange for the first time," Taulli writes in his article, "What Is an Initial Public Offering (IPO)?".

"In this way, any investor can buy shares and the company can raise capital to grow," he adds.

But IPOs can be volatile — especially for retail investors. While IPO stocks tend to have strong first-day showings, returns for the first year are generally weak, says the team of analysts at Trivariate Research, a market research firm based in New York.

As for retail investors, whether you buy the Chime IPO boils down to your own personal investing goals and risk tolerance.

If you decide to buy CHYM stock when it first begins trading, do so in a small amount that you can afford to lose.

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Heading into 2025, the outlook for initial public offerings (IPOs) seemed to be turning a corner. But those expectations proved overly hopeful – at least for now.

Several highly anticipated upcoming IPOs have hit the brakes. StubHub, a ticketing marketplace, has shelved its plans, while Klarna – a buy-now-pay-later platform – continues to delay its long-anticipated debut. Both were widely believed to be ready to launch their IPOs in April.

Chime, a well-known fintech player, and Hinge Health, a digital health startup, have also opted to wait to go public.

If this feels familiar, that's because it is. IPO volumes have been underwhelming for the better part of the past three years.

In 2022, just 71 companies went public, raising a mere $7.7 billion, according to Renaissance Capital, which is a provider of pre-IPO research and IPO-focused ETFs.

Activity picked up in 2023 with 150 deals totaling $29.6 billion. But that still paled in comparison to the IPO boom of 2021, which saw 397 offerings raise a staggering $142.4 billion. Even in 2020, amid pandemic uncertainty, there were 221 initial public offerings for $78.2 billion.

In 2025, only 70 offerings have raised $9.9 billion. That's barely on pace with last year.

So what's happening? And when might the IPO market get back on track?

Volatility, valuation concerns keep IPOs on ice

The U.S. IPO market remains mired in uncertainty. Much of the recent chill stems from renewed global trade tensions – specifically, President Donald Trump's "Liberation Day" tariffs that were announced on April 2, which sparked retaliatory moves and reignited fears of a broader trade war.

This uncertainty, coupled with a sell-off in tech stocks and increasing market volatility, has made pricing new offerings a major challenge.

"There was a pretty clear shift in IPO sentiment after the tariff announcements, which introduced a lot of uncertainty into the market," says Avery Marquez, director of investment strategies at Renaissance Capital.

"Volatility can be a strong headwind for new issuance, even when investor sentiment and risk appetite are robust. But this came while the trading environment was already somewhat weak in the wake of the mid-Q1 sell-off," Marquez adds.

Beyond tariffs, macroeconomic pressures – including inflation, higher interest rates and geopolitical instability – have spooked investors.

Given the cloudy outlook, major public companies such as Ford Motors (F), General Motors (GM), United Airlines (UAL), Mattel (MAT) and UPS (UPS) have scaled back or withdrawn their financial guidance.

It's no wonder, then, that executives at IPO-bound firms are also treading carefully.

Meanwhile, some of the most promising startups, especially in AI, are opting to stay private longer. OpenAI's $40 billion raise at a $300 billion valuation is just one example of a company flush with cash that sees little reason to brave the public markets at the moment.

"Today's founders have a far wider array of financing options available to them," said David Spreng, chairman, founder and CEO of Runway Growth Capital.

Expansion in the private credit and venture debt markets allows private companies with solid fundamentals to get the capital they need, Spreng adds. "Rather than rush toward an IPO, many late- and growth-stage businesses are choosing to stay private longer, using minimally dilutive debt to extend their runway, strengthen their businesses and preserve ownership."

Are there signs of a thaw?

Still, there are glimmers of optimism that activity in the IPO market is starting to pick back up.

The Renaissance IPO ETF (IPO) share price has recovered to levels not seen since early February, reflecting a modest revival in investor interest.

The Cboe Volatility Index (VIX), a measure of "fear" in the stock market, has also eased off recent highs, suggesting a slight calming of investors' nerves.

And new deals are happening, albeit selectively. Two insurance firms, American Integrity (AII) and Aspen Insurance (AHL) went public in early May and collectively raised more than $500 million.

And while the CoreWeave IPO – a provider of infrastructure for AI developers – underwhelmed at first, the stock has since climbed above its IPO price, a positive sign for others waiting in the wings.

Market watchers believe that when IPO activity resumes in earnest, it will center on well-established, cash-flow-positive businesses in resilient sectors – think defense and artificial intelligence (AI).

Ultimately, the IPO market tends to rebound faster than expected once conditions improve. The key will be less about chasing the next unicorn and more about rewarding strong fundamentals. Until then, companies and investors alike are playing a cautious, wait-and-see game.

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The market for initial public offerings (IPOs) hasn't heated up as fast as many expected this year. Still, things look to be improving compared to 2024, with 69 IPOs filed through March 28 – up 30% year over year – according to Renaissance Capital.

And one of the most-anticipated upcoming IPOs of the year just dropped. Earlier this month, CoreWeave filed paperwork to go publi. And on March 28, shares of the tech stock began trading on the Nasdaq under the ticker symbol "CRWV."

Ahead of its market debut, CoreWeave priced its IPO at $40 per share, below the previous range of $47 to $55 per share. This raised $1.5 billion for the company, based on the 37.5 million CRWV shares that were made available. This makes it one of the biggest IPOs in recent memory.

Shares opened on March 28 trading at $39 and bounced between $37.50 and $41.89 before ending the day squarely at $40.00.

"This was the first major IPO to test the market since the recent sell-off, and it didn’t deliver," says Bill Smith, CEO and founder of Renaissance Capital. "A mountain of debt, an unclear moat, and a raft of related-party transactions weighed heavily on the deal."

Smith adds that "rumors of canceled service agreements and technical loan defaults added more 'hair' to an already hairy deal."

CoreWeave originated as a crypto mining firm before shifting to a cloud-computing company whose main business now involves renting artificial intelligence (AI) infrastructure to AI developers. The company has 32 data centers across the U.S. and Europe that are equipped with Nvidia (NVDA) chips.

Nvidia is among CoreWeave's high-profile investors, with a reported 6% stake in the firm – and it counts itself as one of the company's noteworthy customers. Meta Platforms (META), OpenAI and IBM (IBM) are also included among its clientele, while Microsoft (MSFT) has committed to spending $10 billion at CoreWeave through 2030.

How much is CoreWeave worth?

According to its S-1 filing with the Securities and Exchange Commission (SEC), CoreWeave had $1.9 billion in revenue in 2024 vs $229 million in 2023. The bulk of its revenue last year came from Microsoft.

Its net loss widened to $863 million in 2024 from $594 million in 2023.

CoreWeave's adjusted operating income margin, or the difference between the adjusted operating margin and net sales, was a respectable 19% at the end of 2024. It also had $15.1 billion of remaining performance obligations as of December 31, up 53% over the year prior.

Should you buy CoreWeave stock?

"An initial public offering enables a private company to 'go public,' or start trading in public markets, by issuing its own shares on a stock exchange for the first time. In this way, any investor can buy shares and the company can raise capital to grow," writes Kiplinger contributor Tom Taulli in his feature "What Is an Initial Public Offering (IPO)?".

But IPOs can be volatile – especially for retail investors. While IPO stocks tend to have strong first-day showings, returns for the first year are generally weak, says the team of analysts at Trivariate Research, a market research firm based in New York.

As for retail investors, whether or not you buy the CoreWeave IPO boils down to your own personal investing goals and risk tolerance. If you do decide to buy CRWV stock when it first begins trading, do so in a small amount that you can afford to lose.

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Investing in companies before they go public, also known as pre-IPO investing, has garnered considerable interest, especially in recent years. The allure is undeniable: the chance to get in early on the next big thing, potentially reaping significant rewards when the company goes public. However, like with all investments, pre-IPO investing comes with risks.

So, is it worth it? Here we’ll weigh the potential risks and rewards to determine if it’s a worthwhile strategy for the average investor.

What is pre-IPO investing?

Pre-IPO investing involves purchasing shares of a private company before its initial public offering (IPO). These shares are typically offered at a lower price compared with the expected IPO price, presenting an opportunity for substantial gains. Investors might access these shares through venture capital firms, private equity funds or specialized pre-IPO investment platforms.

While there are risks to pre-IPO investing, it’s important to distinguish between pre-IPO and early-stage investing, because they have different risk profiles. Early-stage investing is typically investing at the seed or Series A stage, when a company is in its infancy and just starting to grow. Many companies at this stage are still developing product-market fit, building out their business model and gaining initial market traction. While investing at this stage can have great upside potential, because these companies can have so much growth ahead of them, there is also more risk. Starting a business from zero is hard, leading to the statistic that 90% of startups fail. So, while there is high reward potential, early-stage investing comes with a high degree of risk.

Pre-IPO investing is different from early-stage investing. This stage of private market investing focuses on more established companies that are typically one to four years away from an exit. These later-stage companies have typically raised at least $50 million in capital from top-tier VCs, have valuations north of $500 million and have established business models. Examples of pre-IPO companies that have since gone public include Lyft, Pinterest, Docusign, Spotify and Instacart, among others. These businesses are growing rapidly, but they have made it past the early stages of their life cycle. As they prepare for an IPO, they are typically scaling their organization and putting key hires in place to help the company transition to its next phase.

Given the size and scale of these businesses, they typically pose less risk than early-stage companies. While there is still risk, which we’ll discuss further below, they should not be considered in the same category. This is a key distinction when it comes to evaluating the risk of pre-IPO investing.

The appeal of pre-IPO investing

High potential returns. The most compelling reason for pre-IPO investing is the potential for outsized returns. Recent research has shown that investing in late-stage companies before an IPO can result in strong returns, while mitigating some of the risk that comes with investing in early-stage companies. You can consider this the pre-IPO sweet spot.

Exclusive access. Investing pre-IPO allows investors to access opportunities usually reserved for institutional investors or ultra-wealthy individuals. The growth of pre-IPO investment platforms has been key to democratizing access to these investments to accredited investors, allowing a broader group of investors to participate in pre-IPO growth.

Portfolio diversification. For sophisticated investors, adding pre-IPO shares an diversify an investment portfolio, reducing dependency on public markets and traditional asset classes. Furthermore, as companies stay private longer, growth equity returns have moved to the private markets. More investors are investing in the private markets to tap this return profile that is less often available in the public companies given shifting market dynamics.

The risks involved

Lack of liquidity. Pre-IPO shares are not as easily tradable as those in public markets. Investors should expect to wait several years before a company goes public or is acquired, during which their capital is typically locked up.

Higher uncertainty. Startups and private companies often operate in highly competitive environments. On top of this, private companies are not required to disclose information about their financials, growth and performance publicly, which can pose a due diligence hurdle for private market investors. Even with thorough due diligence, the success of these companies can be unpredictable. Working with an experienced broker in the pre-IPO market can help mitigate this risk and arm investors with the information needed to make prudent decisions.

Valuation risks. Determining the fair value of a pre-IPO company is challenging. Overvaluation at the time of investment can result in disappointing returns, even if the company performs well post-IPO.

Regulatory and market risks. Changes in regulatory landscapes or market conditions can significantly affect the trajectory of a private company. For instance, shifts in data privacy laws, technology standards or economic downturns can adversely affect their prospects.

Mitigating the risks

Thorough due diligence. Investors should rigorously analyze the company’s business model, market potential, financial health and management team. Consulting with financial advisers and leveraging expert insights can be invaluable.

Investing through reputable platforms. Choosing established and reputable investment platforms, such as the one I work with, EquityZen, or funds that specialize in pre-IPO investments can provide additional layers of vetting and risk management.

Diversification. Allocating only a small portion of one’s portfolio to pre-IPO investments can mitigate risk. Investors should think about their pre-IPO allocation in the context of their broader alternative investment exposure. In addition, diversifying across multiple companies and sectors can also reduce the impact of any single investment’s poor performance, especially for first-time investors.

Long-term perspective. Pre-IPO investments should be approached with a long-term mindset. Patience is essential, as the path to liquidity can be lengthy and unpredictable. This illiquidity premium, however, is part of why return potential can be greater too.

So, is pre-IPO investing worth the risk?

Pre-IPO investing is not for everyone. It requires a tolerance for risk, the ability to conduct or access thorough due diligence, and the patience to wait for potential returns. However, for investors who can navigate these considerations and determine the right percentage of their portfolio to allocate to pre-IPO companies, the rewards can be substantial.

Ultimately, like any investment strategy, pre-IPO investing demands a careful assessment of one’s financial goals, risk tolerance and the specific opportunities available. By balancing the potential for high returns with the inherent risks, investors can make more informed decisions about whether pre-IPO investing is the right choice for their portfolios.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

It was an interesting first quarter for investors as stocks climbed a wall of worry, carving out record highs along the way. Indeed, the Dow Jones Industrial Average, S&P 500 and Nasdaq Composite gained between 5% and 10% over the three months.

This impressive price action once again came at the hands of several mega-cap tech and communication services stocks. Among the biggest gainers were artificial intelligence (AI) chipmaker Nvidia (NVDA) and Facebook parent Meta Platforms (META) – two of the Magnificent 7 stocks – that have surged roughly 80% and 40%, respectively, so far this year. 

New S&P 500 stock SuperMicro Computer (SMCI) created its fair share of tailwinds, too, with shares of the AI infrastructure firm quadrupling since the start of the year – and gaining $41 billion in market value along the way. (Although, this is peanuts compared to the $1 trillion in market cap Nvidia added in Q1.)

Are we in a bubble?

The fast and furious rise in these stocks has led to lofty valuations across the equities market and has several folks questioning if what we're seeing is similar to the dot-com bubble from the early 2000s. There are many ways to spot a bubble, and experts see distinct differences between the two time periods. 

"As was the case in the rally leading up to the March 2000 S&P 500 high, the recent market rally has featured a relatively small number of technology-oriented stocks pushing the S&P 500 higher," says Scott Wren, senior global market strategist for Wells Fargo Investment Institute. 

Wren points to a key difference between then and now: The quality of the companies leading markets higher.

"Today, the companies driving the rally are showing strong revenue and earnings growth to go along with robust balance sheets and acceptable debt levels," the strategist says. "Back in 2000, many of the companies carried the SPX to record levels based on high hopes of one day producing strong revenues and earnings." 

That's good news for bullish investors hoping to ride the wave higher – but there's a lot at stake over the next three months that could quickly shift sentiment. 

With this in mind, we'll take a look at the Q2 investing outlook and how the key themes experts are watching could impact portfolio returns.

Earnings

First-quarter earnings season kicks off in two weeks when big banks such as JPMorgan Chase (JPM) and Bank of America (BAC) report. Q1 saw turbulence in the regional banking industry after New York Community Bank (NYCB) crashed on commercial real estate concerns.

Rodrigo Sermeño, associate editor for The Kiplinger Letter, believes declining values in office buildings will continue to pressure some banks. But large banks "should avoid the stock sell-off because they are more diversified and have set aside greater reserves to cover potential loan losses than smaller banks."  

As a group, analysts have been less pessimistic about the upcoming earnings season, says FactSet Senior Earnings Analyst John Butters. Companies, however, have been more pessimistic. This has resulted in earnings estimates that are lower today vs where they were at the start of the year, he adds.

Still, S&P 500 earnings are expected to be up 3.4% year-over-year in Q1, which would mark a third straight quarter of growth.

For investors, the fact that stock prices and valuations are high heading into earnings season "leaves little room for disappointment if companies fail to deliver strong earnings," says Clark Bellin, president and chief investment officer at Bellwether Wealth. 

However, negative earnings reactions can create opportunities for tactical investors.

"On pullbacks, we will be buying the dips of high-quality earnings names, just as we did in October 2022 and November of 2023," says Nancy Tengler, chief executive officer and chief investment officer of Laffer Tengler Investments.

Inflation and rate cuts

The first quarter reminded Wall Street that the final stretch to bring inflation down to the Fed's 2% target will be the hardest. Consumer Price Index (CPI) reports for both January and February came in higher than economists were expecting, due mostly to stubbornly high shelter inflation. 

"CPI ex-shelter has been below 2% since June – where a lack of supply has met structural demand, pushing prices ever higher," says Ross Mayfield, investment strategy analyst at Baird Private Wealth Management. However, recent data, such as Redfin's report that new listings hit a two-year high of 3.8% in February and a fourth straight monthly increase in homebuilder confidence, according to the National Association of Home Builders (NAHB), are encouraging, Mayfield notes. 

"Whatever the root cause, multiple forces are working in favor of more inventory – that's good for buyers and the Fed, alike," Mayfield adds.

Still, sticky inflation has pushed back expectations for the Fed to start lowering the federal funds rate from its current 23-year high. 

"The current expectation is that the first Fed cut will take place at the June 12 meeting," says David Payne, an economist at Kiplinger, in his interest rate outlook. Typically, the first rate cut would be followed by additional rate cuts at every other meeting. However, to avoid being "a lightning rod during the presidential campaign season," the Fed may cut on June 20, July 31 and again on November 7, immediately after the election."

If the Fed does cut rates in June, stocks could potentially see a short-term tailwind. According to Charles Schwab, since 1929, the S&P 500 has averaged a 9.9% gain in the six months following an initial rate cut. This improves to 13.4% at 12 months out.

Rate cuts could be good for the bond market too. "We have shown on multiple occasions how bonds have always rallied in the three months before the first rate cut going back to 1970, says Joseph Kalish, chief global macro strategist at Ned Davis Research.

IPOs

The first quarter saw thawing in what has been an ice-cold initial public offering (IPO) market in recent years. According to Renaissance Capital, there were 30 public offerings through March 28, up 20% year-over-year. And the $7.8 billion raised from these offerings triples what was raised in Q1 2023.

Enthusiasm around generative artificial intelligence resulted in an exciting debut for Astera Labs (ALAB), a company that makes data center connectivity chips for cloud and AI companies. This was followed by strong demand for the Reddit IPO, with both events sparking hope that more offerings will soon hit the market.

The list of upcoming IPOs looks exciting, with names such as Kim Kardashian's shapewear brand Skims and online sports retailer Fanatics among those rumored to be going public soon, prompting concerns beginner investors understand what an IPO is before getting swept up in the hype.

One potential offering that Sophie Lund Yates, lead equity analyst at Hargreaves Lansdown, is upbeat about is Databricks, a cloud-based storage and software firm. 

"The AI boom would definitely be a tailwind and should offer a structural growth opportunity," Lund Yates wrote in a note. "Databricks itself isn't ignoring the hype, having acquired generative AI company MosaicML for $1.3 billion in June. The company is hoping it can integrate this tech into its own products."

A rebounding IPO market indicates "an uptick in enthusiasm from both IPO issuers and investors, hinting at shifting market dynamics and a more welcoming landscape for public listings," writes George Chan, global IPO leader at EY.

However, investors should be cautious before buying IPO stocks. While some companies have strong first-day showings, returns over the next year tend to be weak, says the team of analysts at Trivariate Research, a market research firm based in New York. And since 2020, "the average IPO has lagged its industry average by 30% over the subsequent three years following its first closing price."

Bitcoin

Bitcoin went on a monster run in Q1, spiking nearly 70%. Helping the cryptocurrency was the late-January regulatory approval of the first spot bitcoin ETF (exchange-traded fund), which gives "investors direct exposure to the price of bitcoin without the complexities of managing bitcoin ownership directly," says Mason Mendez, investment strategy analyst at Wells Fargo Investment Institute. 

Between January 11 and March 28, assets under management (AUM) of the 11 spot bitcoin ETFs on the market reached a jaw-dropping $58 billion, according to Mendez.

More upside could be in store for the digital currency considering the upcoming bitcoin halving event, expected to occur in mid-April.

"Historically, bitcoin halvings have been associated with significant price increases in the cryptocurrency," writes Kiplinger contributor Randy Ginsburg in his feature on bitcoin halvings. "The theory behind this is simple: As the supply of new bitcoins entering the market decreases, the demand for them could surpass the supply.

Before buying bitcoin in hopes it will continue to rise, though, let's remember that the cryptocurrency market remains highly speculative and should be approached with extreme caution. For those interested in dipping their toes into the crypto space, it is crucial that they do their research and only use money they can afford to lose. 

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The Reddit IPO will arguably go down as one of the most anticipated initial public offerings (IPOs) of 2024, and it did not disappoint. On Wednesday, March 20, the social media company priced its IPO at $34 per share, at the top end of its previous range of $31 to $34. 

As for its market debut, RDDT shares opened at $47 on Thursday, March 21, hit an intraday high of $57.80, and settled the session at $50.44. This brought Reddit's market valuation to $8.0 billion.

The platform was founded in 2005 by University of Virginia roommates Steve Huffman and Alexis Ohanian, as well as Aaron Swartz. Reddit was sold to Condé Nast Publications a year later and then spun out in 2011.

The company has grown by leaps and bounds over the past two decades. In Q4 2023, Reddit, which describes itself as "a community of communities, driven by interests and passions," averaged 73 million daily active unique users and 267 million weekly active unique users. 

According to the regulatory filing, the company says that it is going public in order "to advance our mission, become a stronger company, and provide meaningful benefits to our community." 

What is the Reddit IPO?

"An initial public offering enables a private company to 'go public,' or start trading in public markets, by issuing its own shares on a stock exchange for the first time. In this way, any investor can buy shares and the company can raise capital to grow," writes Kiplinger contributor Tom Taulli in his feature "What Is an Initial Public Offering (IPO)." 

One difference between the Reddit IPO and more traditional public offerings is that employees of the social media company were allowed to sell their shares during the offering. Typically, company "insiders" such as the founders, managers and employees – and sometimes early investors – are restricted from selling their shares during what's known as a "lockup period" that generally lasts between 90 to 180 days.

The Reddit IPO focused on its users too. In addition to the company reserving 1.5 million Class A shares to help fund community-related programs that are important to its users, Reddit allowed a set amount of users the opportunity to buy IPO shares at the offering price via a directed share program. However, many users declined the offer, according to CNBC.

Should I buy Reddit stock?

Many high-profile tech insiders were early investors in the social media company. OpenAI CEO Sam Altman, for one, has invested at least $60 million in Reddit and controls 9.2% of voting power. Peter Thiel, who co-founded PayPal Holdings (PYPL) and Palantir Technologies (PLTR), as well as Chinese tech conglomerate Tencent Holdings (TCEHY), were also early investors.

Despite early backing from heavy hitters in the tech sector, retail investors may want to hold tight before rushing out to buy Reddit stock. 

While IPO stocks tend to have strong first-day showings, returns for the first year are generally weak, says the team of analysts at Trivariate Research, a market research firm based in New York. And since 2020, "the average IPO has lagged its industry average by 30% over the subsequent three years following its first closing price."

Alan Vaksman, founding partner of Launchbay Capital, says it's positive that Reddit's opening price landed even higher than expected, but adds that it's important to watch how it goes over the next few weeks and months. 

"Secondary market prices have shown to be an increasingly accurate gauge, and Reddit's last private valuation was around $5 billion, nearly half of what we're seeing it valued at now," Vaksman says. "This could mean great things for other social media companies considering their IPO if the price holds high enough, but only time will tell."

Vaksman also notes that where the company's valuation goes from here "will likely set the tone of how other social media companies will strategize their IPO plans this year, and while it's a tough one, I hope it maintains the profitability it's garnered with this initial public offering."

As for retail investors, whether or not you buy the Reddit IPO boils down to your own personal investing goals and risk tolerance. If you do decide to buy Reddit stock when it first begins trading, do so in a small amount that you can afford to lose. 

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The initial public offering (IPO) world is buzzing on news Singapore-based fast-fashion retailer Shein has filed confidential paperwork to go public in the U.S. While details are sparse, reports suggest that the company could see its stock start trading as soon as 2024. 

Shein was founded in China in 2012 and has quickly become a hot-spot for cheap fashion. The e-commerce company moved its headquarters to Singapore in late 2021, with media reports speculating this was done to bypass China's stringent rules on overseas listings. 

According to its website, Shein uses "on-demand manufacturing technology to connect suppliers to our agile supply chain, reducing inventory waste and enabling us to deliver a variety of affordable products to customers around the world." The retailer has a global workforce of roughly 10,000 people and sells its products in more than 150 countries.

"Fashion companies are heating up in the IPO market, and others rumored to file soon include Vuori, Skims and Golden Goose," says Josh Giordano, director of investment research at Linqto, a private equity platform. "Most recently valued at $66 billion, if Shein's IPO is a success, it will encourage others in the sector to seriously consider the IPO route in 2024. This is a promising outlook for retail investors looking to buy stock and an exciting shift in the private market as we head into the new year."

Schein's financial numbers are impressive. Per The Wall Street Journal, the company had $23 billion in revenue and $800 million in net profit in fiscal 2022. Not too bad when considering Old Navy parent Gap (GPS) had revenue of just $15.6 billion in fiscal 2022, while Chinese e-commerce retailer and Temu owner PDD Holdings (PDD) reported sales of $18.9 billion in its most recent fiscal year. 

Schein IPO faces several hurdles 

However, the retailer's IPO isn't a done deal. Fast fashion has plenty of critics. Shein, specifically, is accused of sourcing its cotton from Xinjiang, where China is believed to have committed human rights abuses against the Uyghur population, though the company has denied the allegations. 

Additionally, "Shein has come under significant criticism for the huge volumes of cheap clothes it produces, the lack of transparency in its supply chain and its appropriation of other designers' work," says Susannah Streeter, head of money and markets at Hargreaves Lansdown.

IPO market is thawing, but challenges remain

Among Wall Street's upcoming IPOs, Shein will likely be one of the most highly anticipated. But just because investors are looking forward to a company going public doesn't mean the excitement will last.

Take Arm Holdings (ARM), for instance, which went public in September 2023 in what was easily the most talked about IPO of the year. And while the Arm offering turned out to be one of the biggest IPOs in U.S. history, the semiconductor stock struggled in the weeks immediately following.

ARM stock has stabilized heading into the final stretch of 2023, though, and is back above its IPO price. The same can't be said for two of this year's other anticipated IPOs, Instacart (CART) and Klaviyo (KVYO), which are both trading below their IPO prices.

Still, the recent pickup in IPO activity "offers some hope for a rebound in 2024 capital markets activity," writes Nathan Stovall, director of the financial institutions research team for S&P Global Market Intelligence. However, higher interest rates "could limit risk appetite," Stovall adds.

IPOs face additional hurdles, with market volatility, a potential recession and unknown "macro consequences of various wars" making most institutional money managers "skittish and unwilling to dive headlong into the IPO pool," says Joe Endoso, president of Linqto.

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Do you let hope triumph over experience in your love life? Go for it. But in your investment portfolio? That's where you need to harden your heart. Nowhere is the conflict between hope and experience starker than the market for initial public offerings, or IPOs. 

The possibility of getting in on the ground floor of a young company is enticing. And for some of the lucky few who are given allotments of shares at the official starting price, a first-day IPO "pop" in share prices can create instant profits. 

Adding to the excitement: 2023 has been great for recent IPOs. The Renaissance IPO exchange-traded fund (ETF), which tracks new listings of stocks that have raised at least $100 million over the past three years, has returned 29% so far this year, compared with 13% for the S&P 500 Index. (Prices, returns and other data are as of September 30 unless otherwise noted.)

The rout in tech stocks suppressed IPO activity in 2022, when just 65 deals raised less than $10 billion overall, says Josef Schuster, founder of IPOX Schuster, a financial services firm specializing in IPOs. That was down from 365 deals in 2021 that collected $134 billion from investors. Through the first nine months of 2023, a total of 76 IPOs have already gathered almost $15 billion from investors. And Schuster expects the rebound to continue through 2024. Among the firms that have hinted at upcoming IPOs: artificial intelligence company Databricks, veggie burger maker Impossible Foods and financial technology company Stripe. 

IPOs have a poor long-term track record for investors

IPOs continue to generate buzz despite their poor long-term track record for investors, making it important for new investors to understand what an IPO is. Between the start of 1980 and year-end 2022, the majority of IPOs lost money over the three- and five-year periods following their debut – even for investors lucky enough to buy at the official offering price, according to an analysis by University of Florida finance professor Jay Ritter. Regular investors did worse. 

Despite blockbusters such as electric-vehicle icon Tesla (TSLA) and vaccine-maker Moderna (MRNA), the average IPO stock bought at the publicly available closing price on its first trading day returned about 6% annualized over three years. An index of all U.S.-listed stocks returned about 11% annualized over the same period, Ritter reports. 

The currently high-flying Renaissance ETF notched a 15.1% average annual loss over the past three years and returned an annualized 1.2% over the past five years, compared with the S&P 500's average annual returns of 10.2% and 9.9% over the same periods.

Be cautious when investing in IPOs

For investors who can tolerate the risk, it's okay to add a smidgen – though only a smidgen – of IPOs to your portfolio now, says Brian Duncanson, a fee-only financial adviser in Vero Beach, Florida. Bear in mind that for every Tesla, there is at least one WeWork (WEWKQ), which is down 99% since its 2021 debut and recently filed for Chapter 11 bankruptcy protection. "If an IPO is going to be a loser, you only want to lose a little. If it is going to be a winner, you only need a little," says Duncanson. 

IPOs can provide some diversification from the mega-size companies dominating the S&P 500, says IPOX's Schuster. And as the IPO market recovers from the 2022 plunge, the stocks launching now are more likely to be "high quality and well vetted," he adds. An example, he says, is 249-year-old footwear maker Birkenstock (BIRK), which went public this fall, with more than $200 million in profits on $1.3 billion in sales in 2022. 

IPO veterans say that any foray into the notoriously volatile sector should be made carefully. But investors can improve their odds by carefully considering what – and when – to buy. 

First, pay attention to the way a firm goes public. In a traditional IPO, a company hires a Wall Street brokerage to help it complete paperwork, choose a starting price and drum up support among investors. Another common method of going public has been worse for investors: Hundreds of companies have merged with "special purpose acquisition companies" (SPACs), which are shell companies that have already sold shares to the public. But according to Ritter, from the start of 2012 through year-end 2022, the average SPAC has traded for less than half its first-day closing price as a newly merged company at the following one-year and three-year marks.  

You'll also want to make sure the company is selling enough shares to allow for smooth trading. When the shares available to trade, or the "float," equal less than about 10% of the company's total number of shares, history shows that the stock tends to be more volatile, Schuster says. 

It's safer to focus on bigger deals and larger companies, says Ritter. Very small IPOs – which he defines as those that raise less than $30 million – tend to "shoot up the first day, then almost immediately collapse," he says. And look for significant revenues. Going back as far as the start of 1980 through 2022, IPOs of companies with more than $100 million in annual sales had a cumulative three-year return of more than 36%, Ritter found, while companies with revenues below that cutoff returned less than 8%.

Because buying a share of stock is essentially buying a share of profits, it shouldn't be a surprise that purchasing stock in money-losing companies is, on average, a money-losing proposition. Share prices of profitable companies were about 30% higher than their first-day closing price three years after launch, Ritter's 2012–22 data shows.

Be choosy about industries. "Biotechnology IPOs are like buying a lottery ticket. They may turn out to be the next Moderna, but the track record is not very good," says Ritter. Gratifying choices in less-glitzy industries include grocery chain Albertsons (ACI), whose stock price has more than doubled since its June 2020 IPO. 

Timing is key. Patience is a necessary virtue for IPO investors. Those who buy on the first day typically pay a premium and then watch the stock plunge over the next several months. A better opportunity often arises when many IPOs suffer another price drop when insiders are allowed to start selling their shares (typically three to six months after the first day of public trading).

Duncanson suggests making a list of IPOs you're interested in and waiting at least six months to see how the stock and the business perform. Then, if you're still interested, set a reasonable price target. IPOs are "the cutting edge of business. But the failure percentage is so high. Wait out at least two quarterly reporting cycles to see if they have overhyped and underdelivered," he says, adding that tech-sector IPOs, in particular, have been plagued by "irrational pricing." 

Two recent IPOs to watch

If you have a little mad money that you can afford to risk on IPOs, and you can wait for the company and its stock price to mature, analysts suggest keeping an eye on two recent IPOs. The first is ARM Holdings (ARM, $54). This British semiconductor developer launched on Nasdaq in mid-September. 

Sara Russo, a technology industry analyst for investment firm Bernstein, notes that ARM is large and profitable. It's on pace to rack up about $2.7 billion in sales and more than 50 cents a share in profits in 2023, according to company estimates, says Russo. ARM stock opened at $51 a share, jumped to more than $63 within minutes and over the next two weeks dropped back to the low $50s. That's still too expensive and risky, in Russo's view. She'll consider the shares a better deal if by April ARM delivers on promises to make more inroads into the booming artificial intelligence market and if the stock drops to about $46 a share.

CAVA Group (CAVA, $31), the rapidly growing Mediterranean restaurant chain, went public in mid June and "has a clear path to profitability," says Jordan Stuart, spokesman for the Federated Hermes Kaufmann Small Cap Fund, which bought shares at the initial offering price. The fast-casual chain offers "Mediterranean bowls with Chipotle speed," he says. 

The company, on track to report more than $700 million in sales in 2023, is opening an average of about one new restaurant each week. Six of the nine analysts following the stock are currently bullish. Morgan Stanley restaurant analyst Brian Harbour is more in the neutral camp with an Equal Weight (Hold) rating. He has set a 12-month price target for the stock of $45 a share, implying a 45% gain from recent levels, but suggests that investors watch closely to see how the firm handles its rapid growth over the next year. "With experience, it's hard to have a Panglossian view of any restaurant IPO early on," he warns.

Instead of taking a flier on a single stock, you can spread your bets by buying an IPO-heavy fund. Be forewarned: Although diversifying your bets is a good move, the returns of IPO funds reflect the volatility and generally lackluster recent returns of the sector. 

More than 40% of the portfolio of the aforementioned Federated Hermes Kaufmann Small Cap Fund (FKASX, expense ratio 1.36%) consists of stocks bought at their IPO. Despite getting the low initial offering prices, the actively managed fund, with $4 billion in assets, ranks in the bottom 60% of small-company growth funds so far this year, as well as in 2021 and 2022, according to fund tracker Morningstar. Strong gains from 2015 through 2020 give it a category-beating annualized 10-year return of 10.3%, however. 

Neither of the two largest IPO index ETFs gets access to low initial offering prices. The largest IPO fund, with more than $700 million in assets, is the First Trust US Equity Opportunities ETF (FPX, 0.61%). The fund follows an index of 100 of the largest and most liquid IPOs, spinoffs and SPACs launched over the past four years. Losses in some of its largest holdings – including Airbnb (ABNB), down about 5% from its first-day close in December 2020 – have weighed on recent returns. The fund notched a 7.1% gain so far this year but lost an annualized 4.1% over the past three years. 

The Renaissance IPO ETF (IPO, 0.60%), with $188 million in assets, is more concentrated, with only about 70 stocks. It has been volatile; before this year's strong gains it plunged 57% in 2022, when the S&P 500 index lost only 18%. The fund has ranked in the top half of mid-cap growth funds in three of nine calendar years, as well as so far this year; it ranked in the bottom half in six of nine years. 

Note: This item first appeared in Kiplinger's Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.

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The market for initial public offerings (IPO) is heating up after being ice-cold for a lengthy stretch. According to Renaissance Capital, the 30 IPOs that launched in the third quarter of 2023 raised a collective $7.8 billion – more than the entire amount raised in all of 2022. 

The vast majority of these funds (63%) were brought in by Softbank-backed chipmaker Arm Holdings (ARM), which raised $4.9 billion in its highly anticipated IPO. Not only did this make the ARM IPO the biggest tech offering since 2019, but it also made it one of the biggest IPOs in U.S. history.

But Arm wasn't the only big name to go public in the third quarter. Investors were also excited about the IPOs of grocery delivery firm Maplebear (CART), which does business as Instacart, and marketing software company Klaviyo (KVYO). These two companies held their offerings shortly after Arm.

These stocks had solid starts on the price charts in the immediate aftermath of their IPOs, but all three have lost ground in the weeks following. And the share-price struggles have only been exacerbated by each companies' respective earnings reports.

IPO earnings met with bearish reaction from investors

Klaviyo was the first to step up to the plate when it reported its third-quarter results on November 7. The company said it finished the three-month period ended September 30 with 135,000 customers, up nearly 24% year-over-year. And the number of those customers that generate more than $50,000 in annual recurring revenue rose 89%. KVYO also reported higher-than-expected revenue of $175.8 million and forecast fourth-quarter revenue that was above analysts' estimates. 

Still, the stock plunged 12.5% the day after reporting, and it is now trading around $25 – well below its $30 per-share IPO price.

It's a similar story for Arm and Instacart, with both stocks tumbling after their respective results. Arm, for instance, closed down 5.2% on November 9, as the company's lighter-than-expected fiscal first-quarter forecast offset 28% year-over-year top-line growth in its fiscal second quarter and earnings that more than doubled from the year prior.

And despite Instacart disclosing third-quarter revenue that was up 14% year-over-year to $764 million – more than analysts were expecting – shares of CART slumped 10.1% on November 9. Commentary from CEO Fidji Simo likely weighed on the stock, as he said lower consumer spending, inflation and interest rates could "continue to dampen our current and near-term growth." 

Arm stock is hovering just above its IPO price of $50, while CART is now trading below its $30 per-share IPO price.

Analysts remain bullish on KVYO, ARM and CART stocks

Despite the negative reactions to earnings and disappointing post-IPO performances, analysts remain overwhelmingly upbeat toward all three stocks, with each maintaining a consensus Buy recommendation according to S&P Global Market Intelligence.

Speaking for the Klaviyo bulls is Mizuho Securities analyst Siti Panigrahi (Buy), who says the company "offers an attractive longer-term story as the business shifts to a broader digital relationship platform, expands up-market, and gains traction internationally." Additionally, with shares trading close to their IPO price, "we believe Klaviyo currently offers an attractive entry point," Panigrahi adds.

As for Arm, BofA Securities analyst Vivek Arya admits the results were "lumpy," but reiterated a Buy rating on the semiconductor stock on expectations that core royalty revenue is "on the cusp of re-accelaration" and amid "more confident" smartphone outlooks from top customers Qualcomm (QCOM) and MediaTek.

Meanwhile, Stifel analyst Mark Kelley (Buy) thinks Instacart's earnings show the company "is on the right path with solid execution in its first quarter." This is due in part to solid trends in advertising and its Instacart+ membership option.

How does the IPO market look going forward?

The pickup in IPO activity in the third quarter "offers some hope for a rebound in 2024 capital markets activity," writes Nathan Stovall, director of the financial institutions research team for S&P Global Market Intelligence. However, higher interest rates "could limit risk appetite," Stovall adds.

Add market volatility, a potential recession and unknown "macro consequences of various wars" to the list of worries that are keeping most institutional money managers "skittish and unwilling to dive headlong into the IPO pool," says Joe Endoso, president of Linqto, a private equity platform.

The dismal performance of Klaviyo, Arm and Instacart is evidence that the IPO market recovery still has a ways to go, Endoso says. "And that these IPOs were specifically structured to manage price – they involved low floats, cornerstone investors, etc. – makes their malperformance all the more stark."

Still, there have been 28 IPO filings so far in the fourth quarter, according to Renaissance Capital, just three fewer than all of Q4 2022, indicating the market is rebounding, albeit at a snail's pace.

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First Arm, then Instacart and Klaviyo. More companies are starting to list publicly this fall, ending a historically quiet IPO market. Yet, by the time many of these companies go public at 10 or 15 years old, it’s worth asking how much growth is left for public market investors to capture. With venture-backed technology companies staying private longer than ever, how do investors go about accessing growth equity investments? The answer is pre-IPO investing.

Wondering how to get started? This guide will provide an overview of the pre-IPO market and a framework for investors to evaluate potential investment opportunities.

Given the cost of going public (which can be substantial in terms of time and resources), the short-termism of the public markets (which can cause public companies to focus on quarterly earnings rather than long-term growth) and the abundance of capital available in the private markets, technology companies have fewer reasons to go public than they did a decade ago.

In 1999, U.S. technology companies typically went public after four years.

Today, the median age at which technology companies list publicly is 12 years. As a result, venture-backed technology companies are reaching valuations of $1 billion and even more than $50 billion, before they go public. This means more value being created pre-IPO and less potential upside for public market investors.

With an estimated $3.8 trillion of market capitalization locked up in private unicorn companies, the private secondary market is unlocking that value for investors who had previously been shut out due to high investment minimums and exclusivity.

First of all, what is the private secondary market?

The private secondary market is one in which existing shareholders sell their shares to investors while a company is still private. Typically, these transactions are available to accredited investors. Secondary transactions differ from primary transactions in that the proceeds of a secondary sale go to the selling shareholder instead of the company.

Private secondary marketplaces act as intermediaries between shareholders seeking liquidity and investors who want exposure to late-stage technology companies before they ultimately go public or get acquired. Once an investment is made, investors hold these shares typically via a fund, until there is an exit event. A holding period of two to seven years is not unusual. If the company goes public, investors receive shares they can sell after the IPO lockup period. If the company gets acquired for cash, investors receive cash.

Private secondary investments are typically made in later-stage firms. They tend to exceed $500 million in valuation, generate significant revenue, demonstrate market traction and are backed by top-tier venture capitalists. These companies aim to prove their business models have staying power, with many generating hundreds of millions of dollars of revenue and employing thousands of workers. Twenty years ago, such firms would already be publicly traded.

Late-stage private companies are different from early-stage companies, which tend to have high market, product and execution risk. While early-stage companies can create outsized rewards for the earliest of investors, they are risky. Therefore, on a risk-adjusted basis, late-stage companies tend to provide a growth-equity-style return.

For this reason, many investors consider late-stage private company investments as part of their growth equity allocation. Recent studies have shown that late-stage investing can drive strong returns. In fact, according to one study by Manhattan Venture Partners, investing at the price of a company’s Series E, F or G has generated a mean annualized return of 75%-plus six months post-IPO.

Meanwhile, investors who invested after the IPO, measured as the closing price on the first day of trading, achieved a mean return of -1.4% over the same period. If you’re long-term minded, investing before the IPO may be meaningfully more rewarding than investing on the day of the IPO.

Evaluating pre-IPO investment opportunities

Unlike public companies, there are fewer disclosure requirements for private firms, which can mean greater risk. So how do you evaluate a pre-IPO investment opportunity? Here are some important things to think about.

Business overview. What does the startup do, and how does it generate revenue? What makes this company great?

Market. What is the size of the market that the target company is seeking to capitalize on? What is its go-to-market strategy? Who are its competitors and how does it differentiate itself?

Team. What gives the company’s leadership an edge?

Investment terms and pricing. What are the terms, and what is the price you’ll pay for shares? In the private markets, while primary market pricing is set by the institutional investors who lead a financing event, secondary transactions are typically priced relative to the company’s most recent round of primary funding. The price can also be influenced by factors of supply and demand, as well as the share class of the shares you are purchasing. You can learn more about other factors that impact secondary pricing on the EquityZen blog.

Risks. What could go wrong, and how is the company taking steps to mitigate those risks? These risks will be unique to your target company and could include things like economic risk, competition risk, financial risk and operational risk.

Outcomes. What type of returns could this investment generate? Use the information you gathered above to estimate a base, bull and bear case for your investment.

Highlights. What makes this a compelling investment opportunity? Each investment will have its own unique highlights, for example:

• Has your target company achieved “product market fit” meaning, has its product gained traction with its target customer?
• Is the company profitable? Does it have a strong balance sheet?
• Have top-tier venture capital investors invested in the company?
• Do you have the opportunity to purchase shares at a compelling valuation?
• Is the company quickly gaining market share in a large and growing market? Does it have room to grow?

Investment decision. If you've gotten this far, you're ready to make an investment decision. Nice work!

So where do you go to invest in late-stage companies before they go public? Due to the relative recency of the private markets, one additional decision to make is to select the right partner to help you execute the pre-IPO trade. EquityZen, the platform I founded, is one of the leaders in the market and has helped investors make over 47,000 investments in over 450 companies. We provide in-depth analysis on private companies, informed by 10 years of trading in the private secondary market. Another option is Nasdaq Private Market.

There is so much more to learn about the exciting innovations happening within private companies. As companies stay private longer and the private market grows, pre-IPO secondary investments will become increasingly important to drive meaningful returns and a well-balanced portfolio.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

The hottest initial public offering (IPO) in years has thus far lived up to its hype. Arm Holdings (ARM) priced its IPO at the top end of its range of $47 to $51 a share. The listing gives the British chip designer a market value of $54.5 billion, while raising $5 billion in fresh capital in the process. 

Arm's American depositary shares began trading September 14 under the ticker ARM on the Nasdaq Global Select Market. ARM opened today at $56.10. Shares reached $66.28 in intraday trading before settling at $63.59. 

As the biggest upcoming IPO of 2023, Arm was bound to get more than its fair share of attention. That the ARM IPO also happens to be taking place in the red-hot tech sector only adds to its allure.

Parent SoftBank Group acquired Arm in 2016 for about $32 billion, so it appears to have put its initial capital to good use. Retail investors typically don't get access to hot IPOs, which is really just as well. It's too easy to buy high under the best of circumstances. Frenzied opening day trading only compounds the problem. 

But there's a pretty bearish fundamental case to be made against the Arm IPO too.

Steer clear of Arm IPO

David Trainer, CEO of New Constructs, a research firm powered by artificial intelligence, is best known for being skeptical of some of the hottest IPOs of the past few years. So when Trainer puts out a bearish call on the Arm IPO, it's bound to generate controversy. 

"After a nearly two-year drought in the IPO market, SoftBank is wasting no time by offering Arm Holdings to the public markets, and at a valuation that is completely disconnected from the company’s fundamentals," Trainer writes in note to clients Tuesday. 

The analyst adds that Arm's valuation "implies that the company needs to grow its revenue by over 20% compounded annually every year for the next decade, which is a highly unlikely scenario."

Arm faces a growing brigade of formidable competitors in each of its end markets, Trainer notes. "Many of the competitors have more than enough capital and expertise to build their own custom solutions and box Arm out of many of the markets in which it needs to grow to justify its lofty IPO valuation," he says.

The bottom line? "Investors should avoid this IPO, as we see very limited upside ahead," Trainer says.

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Grocery delivery service Instacart has filed for an initial public offering (IPO) to list stock on the Nasdaq exchange under the ticker symbol “CART.”

The company, which filed the IPO under the name Maplebear, did not disclose the number of shares or the expected price range in its Securities and Exchange Commission (SEC) filing.

According to IPOScoop.com, however, the IPO could come as soon as September and fetch up to $1 billion in new funding for the company.

In its filing, the company offered a first look at its financials. It said that for the six months ended June 30, revenue increased 31% to $1.48 billion, on net income of $242 million, compared to a net loss of $74 million in the year-ago period. For the year ended December 31, 2022, revenue grew 39.1% to $2.55 billion, on net income of $428 million, compared with a net loss of $73 million in the same year-ago period.

COVID helped to boost scale, profits

“Starting in March 2020 and through the first quarter of 2022, our growth was significantly accelerated by the COVID-19 pandemic,” the company said in the filing. “While we do not expect our pandemic-accelerated growth rates to recur in future periods, our growth during this period helped establish a business with much greater scale and much higher gross profit.”

Instacart also disclosed that PepsiCo has agreed to purchase $175 million of Series A redeemable convertible preferred stock in a private placement, contingent on the close of the offering.

Other investors that have indicated an interest in participating in the IPO are Norges Bank Investment Management, a division of Norges Bank, and entities affiliated with venture capital firms TCV and Sequoia Capital as well as with hedge funds D1 Capital Partners and Valiant Capital Management, per the filing.

Goldman Sachs and J.P. Morgan are listed as the lead underwriters for the IPO.

The company names several competitors in its filing including Amazon, Target, Shipt, Walmart, DoorDash, Uber Eats, Gopuff and Thrive Market.

Instacart said that most consumers choose to shop at brick-and-mortar grocery stores, “regardless of whether we partner with the retailers that operate these stores.” The consumer cost to switch between online grocers is low, Instacart said.

“Consumers within various demographics have a propensity to shift to the lowest-cost or highest-quality provider and may use more than one delivery platform,” the company said.

Founded in 2012, Instacart said it serves more than 1,400 national, regional and local retail banners with more than 80,000 stores that represent over 85% of the U.S. grocery market.

The IPO filing came on the same day that marketing automation platform company Klaviyo filed to go public and just days after Softbank’s semiconductor design firm Arm Holdings filed, in a sign that the IPO market may finally be heating up.

The IPO market remained a ghost town after a stellar 2021, with last year one of the worst on record, as Kiplinger recently reported. While there has already been some improvement this year, the implosion of Silicon Valley Bank is a major factor in depressing recent deal activity, as reported.

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Despite a slow start to the year due to private credit concerns, a broader risk-off backdrop and volatility sparked by the war in Iran, activity in the initial public offering (IPO) market is picking up.

According to Renaissance Capital, there have been 121 IPOs filed so far this year through June 18, up 7.1% from the year-ago period. The $111.4 billion in proceeds raised from the 76 firms that priced their offerings is up sixfold from the year prior.

The bulk of this massive growth in proceeds came courtesy of SpaceX (SPCX), Elon Musk's satellite and space exploration company that recently went public in the biggest IPO ever — raising $75 billion in its offering.

If the Iran conflict resolves quickly "with oil flow resuming to prior levels and earnings continue to deliver, conditions are in place for a faster pace in 2026," says Kaush Amin, head of private market investing at U.S. Bank. "What will matter most is pricing discipline and deal quality."

Amin expects "several large listings this year," including Anthropic and OpenAI, both of which are "capex heavy and will require access to public markets sooner rather than later given the size of their spending budgets."

More companies appear to be testing the waters, too, making now the best time to explore the most anticipated upcoming IPOs.

For those looking to gain exposure to these new stocks, it's imperative to have an understanding of what an IPO is before jumping in.

"It's important to read the offering materials filed with the Securities and Exchange Commission and available on the SEC website," says Amin. "Investors should review risk factors, dilution, governance and how proceeds will be used." They should also be aware of "lock‑ups and potential 'market overhang' as more shares become eligible for sale later," he adds.

Having covered the most promising upcoming IPOs for Kiplinger for several years, I've crafted this latest list to spotlight larger, well-established companies that are sure to gain the attention of both Wall Street and Main Street.

Data is as of June 18. Where possible, we have provided reported expectations for timelines and/or valuations for the upcoming IPOs.

Cryptocurrency was one of the hottest categories for IPOs in 2025. Notable offerings included Circle Internet Group (CRCL), which has more than doubled since it began trading last June, and Bullish Global (BLSH), which soared in its August market debut but is now down nearly 35%.

Other crypto companies are lining up to launch their own IPOs. Among them is Grayscale Investments.

Grayscale, a top digital asset manager founded in 2013, filed its IPO paperwork with the SEC in mid-November. Grayscale reported $35 billion in assets under management in its filing, and that figure will likely rise as industry demand increases.

The Grayscale Bitcoin Trust (GBTC) is its flagship fund. It also offers vehicles to trade ethereum-focused themes, bitcoin miners and early crypto adopters, as well as income-focused ETFs that use option strategies.

The Trump administration has made improving the regulatory environment for the crypto industry a top priority. And more and more people are using and investing in digital assets – helped by a proliferation of crypto-focused ETFs.

Potential risk factors remain substantial – this is still an emerging technology, and crypto remains a highly volatile asset class.

The bitcoin ETF corner of the market is highly competitive, with players such as BlackRock (BLK) and Fidelity Investments. This is likely to mean pressure on investment fees.

As for its IPO, recent reports suggest the company has delayed its IPO due to market conditions, and might not seek going public until Q4 2026. We'll be tracking its progress.

Avalara launched an IPO in the summer of 2018, raising $180 million. Shares shot up 87% on the first day of trading. Four years later, management announced an $8.4 billion going-private transaction led by private-equity giant Vista Equity Partners.

Founded in 2004, Avalara develops software to help customers manage advanced tax and compliance requirements. It serves more than 41,000 customers and 1,400-plus partner integrations. In all, the platform has processed and filed more than six million tax returns.

According to Fitch, fundamentals are solid: "Avalara is positioned for strong growth, supported by favorable industry tailwinds."

As Fitch notes, Avalara serves the U.S. tax compliance software market and its estimated total addressable value of approximately $15 billion.

Its focus area is the small and medium-size business (SMB) segment, which represents more than half of the total market and is less penetrated compared with bigger enterprises.

What’s next? Avalara is preparing to go public again. In July 2025, management revealed it had submitted a confidential Form S-1 filing with the SEC.

In 2021, siblings Dario and Daniela Amodei cofounded Anthropic. Before this, the pair were executives at OpenAI, where they disagreed with the strategic focus and wanted to build a platform that would emphasize safety and transparency.

That strategy proved profitable. Today, Anthropic is the second-biggest private AI company, behind OpenAI. The company develops some of the world's most sophisticated AI models and also operates the Claude chatbot.

In November, Microsoft (MSFT) announced a strategic partnership with Anthropic, which included a $5 billion investment. Nvidia (NVDA) also agreed to invest up to $10 billion in the AI startup. These investments give Anthropic a $350 billion valuation.

More recently, the company raised $65 billion in a new round of funding, which gives it a $965 billion valuation.

For 2025, Anthropic brought in $9 billion in revenue. Amodei said recently that the company's annual revenue run rate for this year had surpassed $30 billion by April 2026.

As for an Anthropic IPO, the company confidentially filed paperwork with the SEC in June, with many speculating it could go public this fall.

Many companies are still struggling to get their data house in order. It's all over the place. Different teams using different systems, formats that don't match, files with missing information or duplicated rows that throw everything off.

Fixing this isn't just tedious; it's a serious obstacle for anyone trying to use artificial intelligence (AI) effectively.

That's the pain point Databricks was built around.

Its story begins in 2009 at UC Berkeley's AMPLab. Matei Zaharia, then a Ph.D. student, developed Apache Spark, a faster, more flexible way to process big data, especially compared to older tools such as MapReduce.

Spark could handle large jobs in memory, making things such as streaming and machine learning more efficient.

A few years later, Zaharia joined up with some fellow researchers, including Ali Ghodsi and Ion Stoica. In 2013, they launched Databricks to bring Spark into the hands of enterprises. The company's platform made it easier to analyze large-scale data in the cloud.

One big innovation: Databricks introduced what it calls a "lakehouse" architecture. It's a hybrid model that merges the strengths of data lakes and warehouses, so users can manage raw and structured data in the same place, without jumping between tools.

Today, Databricks is powering data and AI efforts at more than 10,000 organizations, including AT&T (T), United Parcel Service (UPS) and Block (XYZ).

The company's growth hasn't gone unnoticed. In February, the company said it raised $5 billion in its latest round of funding, giving it a $134 billion valuation.

Why is Databricks eyeing an IPO?

There are a couple of good reasons. Going public adds transparency, which tends to matter for big enterprise customers. But perhaps more important is having a publicly traded stock that makes acquisitions easier. That's something Databricks is already doing at a steady clip. Recent deals include generative AI customization platform MosaicML and Neon, a serverless database platform.

While Databricks has not yet filed paperwork for its IPO, Ghodsi recently told Bloomberg that while it "will be a public company," that likely won't happen during a year full of massive offerings.

Melanie Perkins got the idea for Canva when she was a student at the University of Western Australia. While tutoring graphic design, she observed students struggling with tools such as Adobe (ADBE) Photoshop.

Perkins knew there had to be a different way. She teamed up with Cliff Obrecht to create an online service for designing yearbooks.

Within a few years, their brainchild would grow into Canva, as they created a general-purpose design tool. In the first year, it attracted more than 750,000 users. The momentum would not let up.

Today, Canva has more than 220 million users, and revenue is estimated to exceed $3 billion.

In 2013 — after more than 100 rejections — Perkins and Obrecht raised their first round of capital. In August 2025, the company held an employee stock sale at a valuation of $42 billion, up from $32 billion a year earlier.

Does this mean an IPO is not in the cards? Not necessarily. While Obrecht said in a recent podcast interview that market conditions are more appealing now, there's no specific date on the books for an IPO, with some reports suggesting that it won't come until 2027.

IPOs can be a great way to invest in early-stage growth companies, and gains can potentially be massive.

Then again, the risks can be substantial. "Market history is littered with examples of 'hot' IPOs that have gone on to become market duds," said Ed Ciancarelli, senior portfolio manager at Focus Partners.

"Lyft, Inc (LYFT) went public at $72 on March of 2019 after pricing above the expected range of $62 to $68 per share," Ciancarelli notes. "LYFT closed the first day of trading at $78 and has not seen that level since. Such broken IPOs become the victim of an overly exuberant market and unattainable expectations."

An IPO should be considered a higher risk category for your portfolio. For example, it might be best to allocate no more than 5% to 10% in these types of investments.

Before investing in an IPO, you might want to wait until the excitement subsides.

"Be patient and wait for the stock price to have its inevitable dip prior to investing," suggests Jeff McClean, CEO at Solidarity Wealth. "Unless you are one of the lucky few who have access to pre-IPO stock at reasonable valuations, patience is the best course."

Moreover, it's a good idea to read the S-1, a regulatory filing that includes important information about the company that is planning to go public. Make sure to focus on the prospectus summary, risk factors and the letter from the founders.

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The market for initial public offerings (IPO) is starting to heat up after a period of calm. What is an IPO? And should you seek opportunities to invest in them?

An initial public offering enables a private company to "go public," or start trading in public markets by issuing its own shares on a stock exchange for the first time. Any investor can buy shares, and the company can raise capital to grow.

Investors can easily get caught up in the excitement and hype of an IPO's first day of trading, and it's not uncommon for stocks to see gains of over 50% in their market debut.

However, it's also not uncommon for those same stocks to drop precipitously in the following months or years.

IPOs can be a great way for mom-and-pop investors to benefit from the strong growth of early stage companies. But it's important to understand this type of stock before jumping in.

Why do companies go public?

Most companies use the IPO process simply to raise capital.

Typically, IPOs will raise over $100 million. But some hot IPOs can be enormous.

For example, among the biggest IPOs in U.S. history, Facebook (now Meta Platforms [META]), Rivian Automotive (RIVN) and Uber Technologies (UBER) all raised billions of dollars from their IPOs.

More recently, the 2023 Arm IPO raised roughly $5 billion for the Softbank-owned chipmaker.

While raising capital is usually the main reason for an IPO, there are other potential benefits for a company.

First, an IPO allows a company's investors and employees to sell their holdings. They may have held on to their shares for a long time and want liquidity.

Additionally, public companies can often recruit talented employees. These folks will find comfort in knowing the company's financials if it's public.

There will also be opportunities to benefit from equity-based compensation like stock options.

What's more, an IPO can bring credibility to a firm. Because of the onerous disclosure requirements, larger clients may be more inclined to purchase the company's products.

What are the downsides to a company going public?

There are downsides, too.

The process of going public is not easy. The fact is that few companies meet the requirements Wall Street investors demand.

Usually, this means that annual revenues are over $100 million (or on pace for this within a year or two), growth is more than 25%, and that the company demonstrates strong competitive advantages.

Another potential hurdle: Being a public company is expensive.

"There are the substantial expenses related to preparing filings – like attorneys' fees or audit fees – or maintaining compliance reporting requirements," said Seth Farbman, cofounder and chairman of Vstock Transfer.

"Depending on how long ago the company was incorporated or went through an IPO process, it may also be subject to other regulations applicable only at more mature stages in life cycles like Sarbanes-Oxley Act compliance rules for U.S.-based companies or International Financial Reporting Standards (IFRS) compliance rules for non-US based companies."

When a company decides to launch an IPO, there are numerous steps in the process.

What is the IPO process?

The IPO process is highly regulated, and for good reason.

The main statutes were passed in the early 1930s after the stock market crashed and the U.S. economy plunged in the Great Depression. The focus at that time was to provide more transparency for all investors.

Federal securities laws have also resulted in a fairly consistent IPO timeline.

Let's take a look at the main steps:

No. 1: Bake-off

Wall Street investment banks like Goldman Sachs, Morgan Stanley or J.P. Morgan will manage the process of the IPO. They are often called the "lead underwriters" of the deal (there will usually be two or three for an offering) and they will provide access to the institutional investors.

When a company decides to go public, it will start a "bake-off" process, interviewing a variety of Wall Street investment banks that compete to act as underwriters. Winning the assignment can result in substantial fees for underwriters – not just for the IPO, but for follow-on financings and acquisitions.

Over the past few years, some companies have bypassed lead underwriters. This process is called a direct listing and typically results in lower fees for the company.

But a direct listing is really for those companies that have loyal customer bases and major brand recognition such as Spotify (SPOT), which went public through a direct listing in April 2018.

No. 2: The registration statement (Form S-1)

Next, the lead underwriters will perform due diligence on the company, as will an outside law firm. Their findings will provide information for the registration statement, which is called an S-1.

The S-1 includes the prospectus, with key details of how the company will operate, such as the business plan, risk factors, audited financials, management team bios, compensation and so on. The document is often well over 100 pages.

Once the S-1 is finished, it will be filed with the Securities and Exchange Commission (SEC). But the first several drafts of the document will usually be confidential.

After this, investors can download a copy from the EDGAR database.

The SEC will go through a review process of the S-1 and may request that certain changes be made. These changes will become part of an amended S-1, which will also be published on EDGAR. There will often be several of these filings.

"Generally, the SEC's comments concern things that need to be disclosed better or more clearly or address gaps in the disclosure that need to be filled in for investors," said Megan Penick, partner and public securities chair at law firm Michelman & Robinson.

"While the SEC is not passing on the quality of any investment, through their review process, the company's registration statement should become clearer and have better and more fulsome disclosure."

No. 3: The roadshow

The underwriter will set up a "roadshow," in which the company's senior managers will give their IPO investment presentation to investors across different states and perhaps some countries.

"These days, with Zoom and other electronic meeting platforms, most companies conduct road shows or test the waters presentations over Zoom," Penick said. "This eliminates travel and time costs and can make the presentation process quick for both for the company and for investors."

During the roadshow, the underwriter will get indications of interest from the investors.

This process enables the underwriter to get a sense of the overall demand for the deal and to establish a price range, such as $14 to $16 per share. This information will be disclosed in an amended S-1.

No. 4: The pricing meeting

On the night before the IPO begins trading, the company's senior managers and underwriters will meet to decide on the number of shares to issue and the price of the offering.

"Typically, the pricing of an IPO is determined by various factors, including the company's financial performance, current economic conditions, investor demand for the stock, industry-wide market trends and regulatory requirements," Farbman said.

No doubt, this can be a contentious meeting.

Usually, the underwriters will want a lower price so as to allow investors to get higher gains. But the company's senior managers will try to get a higher price in order to raise more capital.

Given that millions of shares are issued, a $1 change can make a big difference to both sides.

Is it a good idea to buy an IPO?

IPOs can be a great way to invest in early stage growth companies, and there are often hot upcoming IPOs to watch.

And, yes, the gains can potentially be massive. If you invested $10,000 in the IPOs of Microsoft (MSFT) or Amazon.com (AMZN), you would have made millions.

Then again, the risks can be substantial.

"Market history is littered with examples of 'hot' IPOs that have gone on to become market duds," said Ed Ciancarelli, senior portfolio manager at Focus Partners.

"Lyft, Inc (LYFT) went public at $72 on March of 2019 after pricing above the expected range of $62 to $68 per share. LYFT closed the first day of trading at $78 and has not seen that level since. Such broken IPOs become the victim of an overly exuberant market and unattainable expectations."

So, an IPO should be considered a higher risk category for your portfolio. As such, it may be best to allocate no more than 5% to 10% in these types of investments.

Before investing in an IPO, you might want to wait until the excitement subsides.

"Be patient and wait for the stock price to have its inevitable dip prior to investing," said Jeff McClean, CEO at Solidarity Wealth. "Unless you are one of the lucky few who have access to pre-IPO stock at reasonable valuations, patience is the best course."

It's a good idea to read the S-1. Here are some of the key areas to focus on:

Prospectus summary: This will be about 10 to 15 pages and is the first section of the S-1. It's essentially the executive summary of the business.

This includes the description of the products or services, the market opportunity, the growth strategies, the growth metrics and so on.

Risk factors: These are mostly legal boilerplate. But some indicators are worth noting.

For example, be wary of extensive litigation, widespread competition or customer concentration.

Another major red flag is a "going concern" opinion from the auditor.

This means that the company will likely run out of money if there is no IPO.

Letter from the founders: This was started with the Google IPO and has since become popular, especially with tech companies.

The letter can be a good way to get a sense of the long-term strategy of the company.

Finally, you should view the roadshow, which is available at retailroadshow.com. You'll get a good overview of the company and a sense of the vision of the management team.

Who knows, you may be seeing a presentation of the next Bill Gates or Jeff Bezos.

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Bausch + Lomb, a well-known leader in eye care, is about to hit Wall Street in what investment bankers almost certainly hope will jump-start a weak initial public offering (IPO) market.

Bausch Health Companies (BHC) is a global healthcare stock that develops pharmaceuticals, medical devices and over-the-counter medications, with focus areas in eye health, gastroenterology and dermatology.

However, to help streamline its operations and pay down debt, Bausch is spinning off its Bausch + Lomb eye care division in what is shaping up to be one of 2022's most anticipated IPOs.

Bausch + Lomb sells contact lenses, eye drops and even implantable lenses for cataract surgery in more than 100 countries. The division boasts more than 400 products, more than 260 of which came on the market since 2017.

You can thank Bausch + Lomb's robust R&D arm, which has about 850 employees. The current product pipeline includes more than 100 projects, such as treatments for dry eye, contact lenses to slow myopia, and next-gen cataract equipment.

The focus on innovation has helped to grow the top line. For 2021, division revenues jumped by 10.6% to $3.8 billion – part of BHC's overall revenues of $8.4 billion, up 5% – and the company flipped from a loss of $17 million to a net gain of $193 million.

"While it faces significant competition from other brands and generic products, the company is highly profitable with strong cash flow, and it has global brand awareness of more than 70%," says Renaissance Capital, an IPO-focused registered investment adviser.

The Bausch + Lomb IPO will see the company list on the New York Stock Exchange under the ticker BLCO. The offering, expected May 5, should see 35 million shares listed at a price range of $21 to $24 per share. That would see the company raise $788 million at a valuation of $8.2 billion.

The offering is a breath of fresh air in what has been a lousy year for IPOs. Financial markets platform Dealogic says that more than a thousand companies went public in 2021, raising roughly $316 billion in the process.

However, a weakening environment for stocks in late 2021 and into 2022 cramped the market's appetite for offerings. Renaissance Capital says just 26 IPOs have priced in 2022 – off 80% from the same point last year.

Expect other potential offerings to keep their eyes trained on the Bausch + Lomb IPO. A favorable reception could get a few more new stocks into the market.

The initial public offering (IPO) market has come to a virtual standstill after a boffo 2021. But we might finally start to see some of the most anticipated upcoming IPOs of 2022 hit the market.

Last year, offerings bounced back to levels not seen since the dot-com boom; more than a thousand companies went public, raising roughly $316 billion in the process, according to financial markets platform Dealogic. That included massive deals for the likes of Bumble (BMBL), Roblox (RBLX) and Rivian Automotive (RIVN).

But the market drastically changed in the final months of 2021 and into January 2022 – especially for high-growth stocks. Spiking inflation, the omicron COVID variant and expectations for a hawkish Federal Reserve all weighed on sentiment. And what weighs on the market often also weighs on the appetite for IPO investors.

A number of big-name companies that had planned offerings in late 2021 decided to remain on the bench. And they've largely remained on that bench. IPO-focused investment adviser Renaissance Capital says just 26 IPOs have priced in 2022, down 80% from this point last year.

"[Downturns can cause] potential delays for IPOs," says Kelly Rodriques, CEO of global private securities marketplace Forge. "But companies can stay private and raise more money from institutional investors. They can wait until valuations improve."

Still, those appetites can return awfully quickly.

"Unless the markets completely fall apart, IPOs will happen this year," says Kevin Spain, general partner at enterprise software-focused venture capital firm Emergence Capital. "But it will be higher-quality companies, with strong brands and high growth rates."

Indeed, we're starting to see a few more companies testing the waters, making now the best time to explore the most anticipated upcoming IPOs for 2022. Our list of 14 is a smaller number than we typically expect at this time of year because of recent market weakness – but many of them are large, established names that should generate plenty of excitement on Wall Street and Main Street alike.

Data is as of May 9. Where possible, we have provided reported expectations for timelines and/or valuations.

• Expected IPO timeline: Second quarter of 2022
• Estimated IPO valuation: N/A

The origins of Steinway go back to 1853. Founder Henry Engelhard Steinway created his first piano in his Manhattan loft, and as he built out his business, his motto became "to build the best piano possible."

Steinway became one of the most powerful brands in musical instruments. To this day, standout musicians such as Billy Joel, Yuja Wang and Lang Lang use its pianos.

Of course, the company has other offerings than its ultra-premium namesake Steinway pianos. It also has mid-tier Boston and Essex piano brands, as well as Conn-Selmer, an extensive line of instruments including woodwinds, strings, brass and drums.

While you wouldn't imagine that musical instruments change much over time, Steinway has invested in innovation. For instance, the company's Spirio brand of high-end player pianos boasts technology backed by 18 patents, including the ability to stream performances.

Financials have been solid of late. In fiscal 2021, revenues jumped 29.5% year-over-year to $538.4 million, while net income improved by 14.5% to $59.3 million.

The company previously was taken private in September 2013 by Paulson & Co. The firm, led by billionaire John Paulson, agreed to pay more than $500 million.

However, Steinway appears on its way back into the public markets. A deal reportedly is likely to happen within the next couple of months, and despite a challenging market, the company's profitability and powerful brand could make the upcoming Steinway IPO a winner.

• Expected IPO timeline: Second quarter of 2022
• Estimated IPO valuation: N/A

Ara Mahdessian and Vahe Kuzoyan both had fathers who worked as contractors. As a side project, the pair built software for their fathers' businesses – and as the duo continued to build tools, they realized there was a bigger opportunity.

They went after that opportunity in 2013 when they founded ServiceTitan.

ServiceTitan is an operating system for plumbers, electricians, HVAC installers and more, providing applications such as dispatching, marketing, scheduling, payroll, contracts, ads, timesheets and job costing.

In March 2021, the company announced a $500 million round of financing, led by Tiger Global Management and Sequoia Capital Global Equities, at an $8.3 billion valuation, in March 2021. That marked the largest funding of any private vertical software company. At the time, ServiceTitan reported more than $250 million in ARR, up 50% on a year-over-year basis, and more than 7,500 contractors on board.

Reuters reported in September that ServiceTitan is preparing for an IPO that's expected to launch in the first quarter of 2022.

• Expected IPO timeline: Second quarter of 2022
• Estimated IPO valuation: N/A

Mohit Aron has spent the past 15 years or so building scalable IT systems. He's often referred to as the father of "hyperconvergence," which is a sophisticated combined technology covering storage, computing and networking. Combining these functions can offer both simplicity and higher performance.

Aron was on the team that created the Google File System, which handled massive amounts of data. He then co-founded Nutanix (NTNX) in 2009, which eventually went public in 2016. But before the IPO, Aron had moved on to found another hot startup, Cohesity.

Cohesity offers a next-generation backup system to protect enterprise data. But it's far more than storage – Cohesity's technology eliminates silos for data, making easier to use artificial intelligence (AI) and run applications.

The company's last round of funding, in April 2020, was a Series E that raised $250 million at a valuation of $2.5 billion. Investors included Sequoia Capital, Cisco Systems (CSCO) and DFJ Growth. At the time, Cohesity reported a 150% increase in annual recurring revenues (ARR) and a 100% jump in the number of customers.

The company announced a confidential IPO filing in late December, with the offering expected to come within the next couple months.

• Expected IPO timeline: Second quarter of 2022
• Estimated IPO valuation: N/A

Björn Berg and Staffan Gestrelius founded Qlik Technologies, which offers business analytics software, in Sweden in 1993. The company improved and broadened the product over the next two decades, and eventually took the company public in 2010 at $10 per share.

Six years later, Qlik became the target of activist investor Elliott Management, eventually sparking the company to accept a $3 billion, $30.50-per-share offer from private equity firm Thoma Bravo.

Qlik has scaled its operations under new ownership. The company now has 38,000 customers, and its technology platform is extensive, offering services for hybrid data delivery, data warehouse automation, application automation and augmented analytics.

The company has confidentially filed for an IPO, with a deal expected sometime within the first quarter of 2022.

• Expected IPO timeline: Second quarter of 2022
• Estimated IPO valuation: $50 billion

In 1999, at the height of the dot-com boom, Hebrew University professor Amnon Shashua developed a monocular vision system that used cameras and software for vehicle detection. He founded Mobileye around this technology and became a pioneer in the advanced driver-assistance system (ADAS) market. Mobileye's technology greatly improved auto safety with alerts, adaptive cruise control, lance centering and collision avoidance.

Mobileye is no stranger to the public markets. It pulled off its first IPO in the summer of 2014, raising $208 million at a $5.31 billion valuation. But it didn't stay public for long, with Intel (INTC) doling out $15.3 billion to snap it up in 2017.

Mobileye's growth hasn't stopped since then, however. Instead, it leveraged Intel's global consumer base and R&D investments to push its annual revenues from $350 million in 2016 to $1 billion at the end of 2020. (The company adds that revenues through the first nine months of 2021, revenues were up 62% year-over-year.)

Now, however, Intel is looking to unlock the value of this asset – and that means taking the company public again. The influx of capital would help the chipmaker with its plans to significantly expand production.

The Mobileye IPO is expected to hit the markets during the first half of 2021 at a valuation of $50 billion. In light of the strong demand for electric vehicles and self-driving vehicles like those made by Tesla (TSLA) and Rivian (RIVN), Mobileye's second public offering should enjoy an equally warm reception on Wall Street.

Intel isn't completely letting go of Mobileye, however; the chipmaker would retain majority of control after the IPO.

• Expected IPO timeline: Summer 2022
• Estimated IPO valuation: $1 billion to $2 billion

After earning both an MBA and JD from Stanford, Robert Beaver founded five different tech companies. But his largest is Zazzle, which he launched in 2005 with sons Jeff and Bobby, and wife Peggy, as cofounders.

Zazzle is an online marketplace that allows people to create their own products and sell them to customers. Importantly, the platform has sophisticated tools for design, manufacturing and distribution, which allows creators to spend more time simply being creative.

Because the products are customized, they generally enjoy higher margins, and that can at least help to explain why Zazzle has raised relatively little capital. Since inception, it has gone through just three rounds, raising about $46 million from investors over that time.

Bloomberg, citing people familiar with the matter, reported that Zazzle has hired Citigroup and Barclays for an IPO that could arrive as soon as this summer. The company could be valued at between $1 billion and $2 billion.

Very little is currently known about the company's financials, though an eventual S-1 filing would change that. The company has, however, disclosed that it has served more than 30 million customers since its founding. It also boasts more than 300 million shareable designs and more than 900,000 designers on the platform.

• Expected IPO timeline: 2022
• Estimated IPO valuation: N/A

In 2011, Bitcoin was a young digital currency but already showing traction. Of course, it was doing so against a formidable headwind: It was exceedingly difficult to buy and sell cryptocurrency.

Peter Smith, Nicolas Cary and Ben Reeves set out to solve this problem. Their solution – developed in their two-bedroom apartment in York, England – was Blockchain.com.

The company started as a place to get prices on Bitcoin. But this would quickly evolve into the development of a highly popular digital wallet and cryptocurrency exchange.

Since inception, the company has processed more than $1 trillion in transactions and created 82 million wallets. About a third of Bitcoin transactions happen on the Blockchain.com network.

Last year, the company raised $300 million, at a $5.2 billion valuation, in a Series C round. The lead investors included DST Global, Lightspeed Venture Partners and VY Capital. The valuation was at $5.2 billion.

Bloomberg reports that the company is planning an IPO and it could happen this year. However, the process is still in the early stages, and it might pay for Blockchain.com to wait. The IPO market for tech companies have been brutal of late. Rival Coinbase (COIN) is off more than 40% since its April 2021 offering.

• Expected IPO timeline: 2022
• Estimated IPO valuation: $5 billion

In 2013, actress Kate Hudson teamed up with online fashion retailer JustFab to create Fabletics. This startup developed a line of workout and activewear for men and women alike, with a simple strategy of selling quality items at affordable prices.

Today, the company not only has a thriving website, but a retail footprint of 74 locations and a "loyal community" of 2 million customers.

Hudson stepped down as the principal face of the business to an advisory role in late 2021, but the company could still be her biggest hit.

In summer 2021, Fabletics reportedly retained Morgan Stanley, Goldman Sachs and Bank of America to prepare for an IPO. At the time, reports said the company would seek to raise about $500 million at a valuation of $5 billion.

While buzz about the deal died down in the later innings of 2021, a Fabletics IPO still is expected to happen sometime in 2022.

• Expected IPO timeline: 2022
• Estimated IPO valuation: $38 billion

A little more than a decade ago, a group of computer science students at the University of California, Berkeley created Apache Spark, an open-source system meant to manage big data. The platform achieved massive adoption alongside growing needs to use systems such as artificial intelligence and machine learning.

A few years later, those students would go on to launch Databricks to commercialize the software for enterprises. Over the years, the company has amassed a customer base of more than 5,000, which includes large corporations such as CVS Health (CVS), Comcast (CMCSA), Condé Nast and Nationwide.

Databricks' latest funding round came in August 2021, when the firm raised $1.6 billion at a $38 billion valuation in a funding round led by Morgan Stanley fund Counterpoint Global. Databricks has raised about $3.6 billion since inception.

While Databricks has not filed its IPO documents yet, the company appears to be angling for an IPO sometime in 2022.

• Expected IPO timeline: 2022
• Estimated IPO valuation: N/A

In 2005, college roommates Steve Huffman and Alexis Ohanian got the backing of Y Combinator to develop an app that allowed users to order food via SMS. It failed to get much traction.

But the founders quickly brainstormed another idea: Reddit.

This next-generation message board, which was acquired by Condé Nast in 2006, had an anything-goes ethos. That often turned Reddit into the source of controversy – as well as a font of meme-stock hype over the past couple years – but it nonetheless grew like a weed over time.

The company now appears to be ready for the big times, with Reddit making a confidential filing to the SEC in December, indicating that a deal could happen during the first couple of months of 2022.

As an example of its recent growth, second-quarter revenues exceeded $100 million, roughly triple its year-ago sales. The company also boasts 50 million daily users.

In August, Reddit announced that Fidelity invested $400 million at a $10 billion valuation. However, in light of the recent market volatility – especially in other social platforms such as Pinterest (PINS), Bumble (BMBL) and Snap (SNAP) – the company could go public at a lower valuation.

• Expected IPO timeline: 2022
• Estimated IPO valuation: N/A

Gourmet grocery chain The Fresh Market is making another go at publicly traded life.

In March 2016, The Fresh Market accepted a $1.36 billion cash buyout from private equity firm Apollo Global. At the time, the grocer was having trouble competing against companies such as Amazon.com's (AMZN) Whole Foods, Kroger (KR) and Publix.

As a private company, The Fresh Market has been focused on restructuring its operations, which currently span 159 locations across 22 states. That paid off after a couple of years with an improvement on its credit outlook, though if the firm does go public, it will do so with a still-high level of debt.

And a year ago, the company hired a new CEO, Jason Potter – the former chief of Canada-based Sobeys who boasts three decades of experience in the grocery industry, and who is known as a cost-cutter.

The IPO looks to be little more than a way for Apollo to exit its investment with a decent return. The company filed confidentially in March for an eventual IPO, which was expected to happen in 2021 but has been pushed into 2022.

• Expected IPO timeline: 2022
• Estimated IPO valuation: N/A

In 2010, Instacart founder Apoorva Mehta left his post as the Fulfillment Optimization SDE at Amazon.com to move to San Francisco and start his own venture. And he ran into a lot of speed bumps, trying out 20 different products to no avail.

But he finally hit upon something with promise: an on-demand network for delivering groceries and other products. At the heart was an app that connected contractors – who did the shopping – with customers.

The pandemic turned 2020 into a game-changer for Instacart. The emergence of COVID-19 has spurred millions of people to adopt app-based delivery services.

Instacart has built a sophisticated logistics system, which involves agreements with more than 400 retailers spanning over 30,000 stores. That network translates into a reach of about 80% of U.S. households and 70% in Canada.

Instacart has still been busy raising funds, including a $200 million round from Valiant Peregrine Fund and D1 Capital Partners, following a $225 million raise in June led by DST Global and General Catalyst, with D1 participating. But Financial Times reported in October 2020 that the company was consulting with banks ahead of a potential IPO, expected sometime in the first half of 2021.

But Instacart has since pushed its plans for an IPO into 2022 and possibly beyond.

"Fidji Simo, a former Facebook executive who took the reins three months ago, [will focus] on strengthening its services for grocery retailers beyond delivery," reported The Information, citing a person with direct knowledge of the matter.

The most recent round of fundraising valued the company at $39 billion – more than twice what it was valued at in a round a few months prior. However, in late March, Instacart cut its valuation by nearly 40%, to $24 billion, reflecting a downturn in the broader delivery space.

Even then, an Instacart IPO would be one of the largest of 2022.

• Expected IPO timeline: 2022
• Estimated IPO valuation: $10 billion-plus

When Jason Citron and Stanislav Vishnevsky were building online games, they had ongoing communications issues with their remote developer teams. The comm systems they evaluated didn't have the features they needed, so they did what many of us couldn't do:

They built their own.

The resultant system, Discord, which allowed for instant messaging, video and voice calls, was popular with gaming communities on Twitch and Reddit in the early days. The system was released in 2015; by 2018, Microsoft's (MSFT) Xbox had agreed to integrate the platform with Xbox Live accounts. Over time, Discord would expand into many other categories, including communities for sports, entertainment, investing, online education and more.

Discord stands out from other chat systems on the market, including Salesforce.com's (CRM) Slack and Google Chat, thanks in part to a high level of customization, which has made its subscription-based system "sticky."

Growth has been white-hot of late, with monthly active users surging from 56 million to 140 million between 2020 and mid-2021.

No doubt, there are many chat systems on the market, like Salesforce.com's Slack. Yet one of the keys to the success of Discord is the customization.

Microsoft reached out to Discord in early 2021 about acquiring it for at least $10 billion, according to media reports. But Discord wanted to stay independent and pursue an IPO, which is expected to happen this year.

• Expected IPO timeline: 2022
• Estimated IPO valuation: N/A

When Zach Perret and William Hockey founded Plaid in 2013, they built apps for different types of financial services, such as budgeting and bookkeeping … but they never really caught on with users.

However, through this process, the founders realized how difficult it was to develop the infrastructure for a fintech startup. So they refocused their firm on building application programming interfaces (APIs) that handled authentication, identity, managing liabilities, processing transactions and so on. Plaid would go on to snag top fintech customers including Betterment, Chime and PayPal's (PYPL) Venmo.

The technology caught on quickly. And as a testament to Plaid's success, Visa (V) agreed to pay $5.3 billion for the company in early 2020. "The acquisition, combined with our many fintech efforts already underway, will position Visa to deliver even more value for developers, financial institutions and consumers," Visa CEO Al Kelly said at the time.

"But Visa doesn't own Plaid," you say. That's correct. The deal received pushback from antitrust regulators, and Visa and Plaid abandoned the transaction in January 2021.

Plaid's momentum nonetheless accelerated. In April, the company raised $425 million at a $13.4 billion valuation in a deal led by Altimeter Capital.

To be clear: Plaid hasn't filed for (or even intimated at) an IPO. But given that an acquisition likely will be tough because of regulatory concerns, an initial public offering looks like an appealing option.

Special purpose acquisition companies (SPACs), or "blank-check" companies, exploded in popularity in 2020. The excitement around SPACs has faded in recent years, but they're once again in the spotlight following the late-March merger of Digital World Acquisition and Trump Media & Technology Group (DJT), the media firm founded by former President Donald Trump that owns Truth Social. 

This likely has many folks wondering what is a SPAC exactly, and how does it differ from other investments?

SPACs allow a way for companies to go public while bypassing the time and expense of an initial public offering (IPO). They really entered the mainstream in 2020 and hit their peak the following year. 

Consider this: In 2019, there were 59 SPACs that raised $13.6 billion, according to SPAC Insider data. By 2020, the number of SPACs grew to 248 with $83.4 billion. And by 2021, those numbers swelled to 613 SPACs and $162.5 billion raised. 

The number of SPAC mergers dropped drastically in more recent years. In 2023, for instance, there were just 31 SPACs that raised $3.8 billion.

While activity in the space is more quiet than it was at its peak, many investors still want to know about the (admittedly complicated) nuts and bolts. This quick guide to SPACs will get you caught up on this rising area of the stock market.

What is a SPAC?

A special purpose acquisition company really only exists to seek out another firm that it can bring to the public markets via a merger.

This is why you'll often hear SPACs referred to as a "blank-check" company: Investors are effectively handing the company a blank check to go out and buy some as-yet-unknown firm.

How do SPACs work?

A SPAC is formed by a management team, typically known as a sponsor, that often has a business background, usually with a specific skillset in a niche industry. They initially pony up a nominal amount of investor capital – usually as little as $25,000 – for which they will receive "founder shares" that often equate to a 20% interest in the SPAC.

After that, the company will then file for and eventually execute an IPO to raise additional funds from the public markets.

When a blank-check company does go public, it usually sells "units," almost always at $10.00 per share. These units often include a share of common stock, but also a fraction of a warrant allowing investors to buy a common share at some point in the future, typically with an exercise price of $11.50 per share. Investors who pony up that initial sawbuck will see their capital go onto the company books as cash.

At that point, the SPAC will trade just like any normal shares, with shareholders free to buy and sell like they would any other stock. But the blank-check company itself is just a pile of cash with no actual business behind it.

Once it goes public, the SPAC typically has between 18 and 24 months to seek out a "target company" and negotiate a buyout. If it does so, it usually will change its ticker to reflect the new entity it has merged with, and shareholders will now be invested in the acquired company.

If the SPAC is unable to make a deal within the predetermined time frame, the SPAC is liquidated. The company's cash is held in short-term Treasuries until then, so the initial investment will be safe, but the company's shares might drop under the IPO price in the course of normal market volatility.

How are SPACS used?

SPACs typically use the funds they've raised to acquire an existing, but privately held, company. They then merge with that target, which allows the target to go public while avoiding the much longer IPO process. At that point, the entity usually is no longer known by the SPAC moniker, but by the name of the acquired company.

Chamath Palihapitiya, whose SPACs have merged with companies including Virgin Galactic (SPCE) and Clover Health Investments (CLOV), referred to his Social Capital vehicle as "IPO 2.0." And that's seemingly what blan- check companies in general have become – another popular way to bring private firms public.

While SPACs can be used to bring any sort of company public, they're frequently being used to merge with companies in emerging fields. For instance, Fisker (FSR), Lordstown Motors (RIDE) and Nikola (NKLA) were just a few dozen or so electric-vehicle companies that went public via a SPAC.

Are blank-check companies good or bad?

All asset classes have growing pains. So unsurprisingly, the rapid rise then fall of SPACs' popularity came with wild price swings. And the latest SPAC, Trump Media & Technology Group, is attracting plenty of investor interest, with the stock trading up nearly 40% on its first day.

And as with most financial innovations, some will abuse the market for blank-check companies, and some will create tremendous wealth for investors.

But there's certainly no shortage of strong opinions on the asset class.

"Reprehensible." That was the word British investor Jeremy Grantham used to refer to SPACs, or at least the craze behind them.

"This is unlike anything else in my career," Grantham told the Financial Times in late 2020. "This was by accident the single biggest investment I have ever made. It gets around the idea of listing requirements, so it is not a useful tool for a lot of successful companies. But I think it is a reprehensible instrument, and very very speculative by definition."

The very same Grantham made a quick $265 million on a stake made years ago in QuantumScape – a battery company that was acquired by a SPAC in 2020.

One criticism is that "less worthy" companies that might not have been able to launch a successful IPO can more easily reach the public markets via blank-check companies. While a potential acquisition still has to pass muster with a SPAC's investment team, it's a far easier process than the traditional road to an IPO.

That easy path meant a rapid succession of SPAC launches in 2020 and 2021.

That surge in SPACs quickly caught the eye of the Securities and Exchange Commission (SEC), issued a warning to investors in April 2021 about the dilutive effects of warrants, whether they are attached to units or not.

"We are issuing this statement to highlight the potential accounting implications of certain terms that may be common in warrants included in SPAC transactions and to discuss the financial reporting considerations that apply if a registrant and its auditors determine there is an error in any previously filed financial statements."

A month later, the commission released an updated bulletin to further educate investors about SPACs.

One clear positive of SPACs is they're improving investor choice.

The number of publicly traded companies in the U.S. has been in long-term decline thanks to mergers, buyouts and companies getting bought out by private equity.

The U.S. had more than 30,000 publicly traded companies in 1996. That number was more than halved to just 13,330 by the start of 2017. That has meant fewer options for long-term investors and shorter-term traders alike.

Investing tips for SPACs

When investing in any asset class or special situation, understanding some of the specific rules of the game can help you avoid big losses and set yourself up for outperformance.

Here are a few things to consider if you plan on investing in SPACs:

Buy the news, not the rumor. SPACs put a spin on an old Wall Street yarn to "buy the rumor, sell the news." While blank-check companies sometimes do move higher on rumors that they might acquire this business or that firm, on average, their best performance comes once they've made the official announcement.

"SPACs perform best in the period following their definitive merger agreement announcement, but before the merger actually closes," YCharts writes in a report on special purpose acquisition companies. "During this lifecycle stage, 70% of SPACs gained value and 46% outperformed the S&P 500. From a SPAC's IPO until its definitive merger agreement announcement, just 15% beat the S&P 500 – this is the most speculative period for SPACs."

Another reason to wait for the news? A blank-check company might pivot from its initially stated goal.

Mind the price, but not the market cap. As we mentioned earlier, blank-check companies typically go public at $10 per share. At that price, the SPAC is funded with enough capital to make an acquisition based on the number of shares outstanding.

However, after an IPO, the price of the pre-acquisition SPAC may vary wildly depending on market conditions, rumors surrounding the shares and other factors. In 2021, it wasn't unusual to see a SPAC trade at $12 or $13 per share, even after going public at $10. Once a deal has been announced, the premium can swell even further. Shares no longer represent just a shell company, but a more concrete opportunity that might very well generate large profits down the road.

Just remember: The higher the premium at which you buy a SPAC, the more you're cutting into potential upside down the road.

Another tip: Market cap doesn't matter much. A company's total cash stake ultimately has more bearing on the size of a target that a SPAC can acquire. And even then, it's only useful in gauging a minimum size, as SPACs must spend at least 80% of their cash on an acquisition.

But they typically spend much more. SPACs often dole out two to three times their cash (and sometimes more) on an acquisition. They typically receive this extra funding via private investments in public equities (or PIPEs), usually after they've announced a merger target.

Don't chase the boat. Fast moves aren't a bug of the SPAC world – they're a feature. But if an investment you're considering has run to ludicrous valuations, don't feel compelled to chase – there's seemingly always another SPAC opportunity waiting right around the corner.

Investing isn't about trying to get rich quickly. In the world of SPACs, fast moves are a huge feature of the space. But if something's already run, don't go chasing after it. There's always another stock opportunity. Don't worry about missing the boat. There's always another.

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Getting in early on the next Tesla (TSLA) or Netflix (NFLX) is a major selling point of SPACs, or special purpose acquisition companies.

SPACs offer an alternative to traditional initial public offerings (IPOs) and have surged in popularity. But picking a winner is far from a sure thing.

Because of the way SPACs are structured – think of them as "blank check companies" whose sole goal is to acquire early-stage businesses and take them public – it's hard for SPAC investors to assess the merits of what they're buying.

SPAC mania has been driven by cheap money, a soaring market and in­vestors' search for new opportunities. SPACs had a breakout year in 2020, with a record 248 SPAC IPOs, a fourfold rise from 2019, according to data provider Dealogic.

High-profile SPAC IPOs that now trade as regular stocks include sports-betting firm Draft­Kings (DKNG) and space-tourism company Virgin Galactic (SPCE). (For more on Virgin Galactic, see How to Cash In on the Final Frontier.)

SPACs got off to a hot start this year, with 315 SPACs listed and $100.4 billion raised through May 7, topping full-year records for 2020. So far this year, SPACs account for 41% of all IPOs.

How SPACs Work

When you invest in a SPAC, you're not investing in a company such as Tesla with real products and sales. You're giving your money to a "sponsor," or investment team, who will identify and invest in the next potential Tesla for you. The sponsor has two years to acquire a yet-to-be-identified company. Until a business combination is completed, the money raised from investors is held in a trust account.

SPAC shares trade on an exchange while the sponsor searches for a company to take public, and it’s not uncommon for SPACs to trade sharply higher as investors react to rumors about merger candidates.

If an acquisition target isn't found in the allotted time, the SPAC will liquidate. IPO investors will get back their initial investment, and buyers in the secondary market can redeem their shares at the initial offer price, typically $10 a share, dubbed the pro rata share.

Once a target company is announced, you must decide whether to stay invested in the new, post-merger company, which will trade with its own symbol, or redeem your shares at the pro rata price. You can get burned if you jump into a SPAC at or near a top.

How Have SPACs Performed?

SPAC fever cooled in mid-February, as SPACs sold off with tech stocks and other speculative issues.

"SPACs were exhibiting bubble-like characteristics, and growing pains were likely," says Jason Draho, head of asset allocation Americas at UBS Financial Services. The wipeout has been swift, with some of the worst-performing SPACs and post-merger stocks down 50% to 70% from mid-February through mid-April, according to Bespoke Investment Group.

Regulatory scrutiny hurt, too. The Securities and Exchange Commission recently warned SPACs about issuing misleading sales projections and noted that SPAC sponsors may pursue deals that aren’t in the best interests of investors.

Overall, post-merger performance hasn't been great. Of the SPACs that brought companies public in 2020, the median post-acquisition return trailed the S&P 500 Index by 13 percentage points after one month and by 27 points after six months, according to investment bank Goldman Sachs. SPACs have also underperformed tra­ditional IPOs by a wide margin. A sizable SPAC pipeline may signal a saturated market. In April, there were nearly 400 SPACs seeking acquisitions, Goldman Sachs says.

David Sekera, chief market strategist at Morningstar, thinks most retail investors should steer clear of SPACs. "I don't think this is an appropriate product," he says.

SPACs were all the rage in 2020, and they've only heated up more in 2021.

Short for "special purpose acquisition companies," these unique vehicles are often referred to as "blank check" shell companies that are set up via an initial public offering (IPO) to raise capital and then quickly acquire an existing business.

Collectively, these kind of firms raised an amazing $73 billion last year. But SPACs have shattered that number in the first three months of 2021 alone. Says ICR, a leading strategic communications and advisory firm:

"SPAC IPO issuance broke all records in the first quarter of 2021, with 298 SPACs raising nearly $88 billion. The tally was more than double the 132 SPACs and $39 billion raised in the fourth quarter of 2020 and more than the 248 SPAC IPOs that raised over $83 billion in all of 2020."

Why are SPACs so popular? Well, startups or other private companies looking to list on Wall Street can really shortcut the process this way. Why court investment banks and potential investors for months or years in pursuit of an IPO, when you can just shake hands with a SPAC and become a publicly traded company as part of the deal?

Individual investors are also enamored with the idea, because if they buy the right SPAC before a big deal breaks, it's similar to being one of those elite investors in on the ground floor.

There are no guarantees a SPAC will identify the right opportunity or spend its capital wisely, of course, but they are very popular right now for a reason.

If you're interested in this unique class of stock, keep your eye on our routinely updated SPAC list: 10 noteworthy names that are on the hunt, and what breakthrough firms they might be buying.

Data is as of April 12.

• IPO date: Dec. 28, 2020
• Capital raised: $230 million

7GC & Co Holdings (VII, $9.84) is pretty exemplary of the kinds of firms you'll find on this SPAC list.

It's a partnership between 7GC, a boutique technology-focused venture capital fund, and serial SPAC issuer Hennessy Capital Investment that has successfully rolled out five blank check entities – including Hennessy Acquisition I, which went public in January 2014 and acquired school bus maker Blue Bird (BLBD) in February 2015, well before the current SPAC craze.

Throw in staff from Uber Technologies (UBER) executive leadership, and you have the perfect mix for a buzzworthy SPAC looking to make a disruptive deal.

Or as 7GC & Co. says in its recent annual report, "Our management team believes that its unique access to technology assets, coupled with a demonstrable SPAC track record, will be central to its differentiated investment strategy."

At the end of March, it was rumored that 7GC could be looking at digital media icon Vice Media, which seems the kind of flashy, tangentially tech-related company right up VII's alley.

• IPO date: March 18, 2021
• Capital raised: $400 million

If you're looking for a SPAC that's headed up by some big names from the C-suite, then look no further than Accelerate Acquisition Corp. (AAQC.U, $10.02).

First, there's Accelerate's CEO Robert Nardelli, former chief of both Chrysler and Home Depot (HD) who also helped oversee dozens of acquisitions while at the helm of GE Transportation and GE Power Systems. Beside him as head of business development is Jeffrey Kaplan, a veteran dealmaker and the former head of M&A at Merrill Lynch.

This team is a bit old-school when compared with flashy 30-something SPAC leaders, but consider this a strength. After all, Accelerate has stated it is interested in established targets that will modernize help modernize the industrial sector rather than disruptive software companies operating on a wing and a prayer.

The company's S-1 filing cites specific areas of potential investment including "automation everywhere; advanced manufacturing and robotics; intelligent asset control and monitoring; dynamic supply chains; next-generation mobility technologies; and environmental sustainability, among many others."

• IPO date: Feb. 9, 2021
• Capital raised: $345 million

HPS Investment Partners has deep experience in the SPAC space despite its very recent emergence on Wall Street. In fact, HPS has brought three different vehicles to market already, meaning you have to pay attention to tickers so you don't wind up researching the wrong one.

First out of the gate was Altimar Acquisition, a $275 million SPAC that closed a deal in December with asset managers Owl Rock and Dyal to combine and form $45 billion investment manager Blue Owl Capital, which should start trading under the ticker "OWL" sometime during the first half of this year.

The ship has sailed on that deal, but HPS's second fund, Altimar Acquisition II (ATMR, $9.94), closed a $345 million offering in early February and is already rumored to be in talks with private photo and digital imaging company Shutterfly public. That would mark a return to the stock market for Shutterfly, which started publicly trading in 2006 before Apollo Global Management (APO) took it private in 2019.

There's also a smaller third fund, Altimar Acquisition III (ATAQ.U), which raised $135 million in March. But the "Goldilocks" fund right now seems to be Altimar II thanks to the rumors of the Shutterfly deal, and the fact it is a bit more mature. With a crack team of investment experts from JPMorgan and Citigroup, investors can have greater confidence in the team's ability to get a good deal done.

• IPO date: Oct. 20, 2020
• Capital raised: $550 million

Peter Thiel, a billionaire entrepreneur and venture capitalist, was one of the first tech leaders to acknowledge that success in Silicon Valley isn't about cooperating or fair competition – it's about building a monopoly.

That mindset is surely going to inform the deal he's looking for via Bridgetown Holdings (BTWN, $11.08). And the fact Thiel built it along with private equity guru Richard Li of Pacific Century Group shows that investors can expect a global flavor to any transaction.

In fact, unlike most of the U.S.-based companies on this SPAC list, Bridgetown is headquartered in Hong Kong.

At the end of 2020, there were rumors that contender was Indonesia e-commerce giant Tokopedia. Eventually Tokopedia wound up merging with another big Indonesian tech giant – ride-hailing platform Gojek – in a deal that formed a $40 billion "super app" for the local market.

While Bridgetown didn't win this juicy prize, it's precisely the kind of deal investors should expect from this duo with deep links to Asia-Pacific and the tech sector. Indeed, more recently. Bloomberg reported that Bridgetown was in talks with Southeast Asian online travel firm Traveloka.

• IPO date: July 15, 2020
• Capital raised: $300 million

D8 Holdings (DEH, $9.95) is a blank check company that has a deep bench of executives with experience at major consumer brands. There's David Chu, founder and former CEO of apparel brand Nautica. There's Fred Langhammer, former CEO of cosmetics icon Estée Lauder (EL). And there's also Terry Lundgren, who served for 14 years as CEO of department-store retailer Macy's (M).

Collectively, this team undoubtedly has what it takes to know how what shoppers want in 2021.

Of course, there's no rule that says D8 must go after a consumer company just because of its exec experience. In fact, a robotic surgery company backed by Microsoft (MSFT) co-founder Bill Gates has recently been floated as a potential target.

Considering that D8 is one of the older SPACs on this list, it wouldn't be surprising to see it look beyond its obvious area of interest out of eagerness to get a deal done. (If a SPAC doesn't acquire a target in a predetermined time frame, in this case 24 months, the company will liquidate and redeem all public shares in cash.)

• IPO date: Oct. 20, 2020
• Capital raised: $500 million

One of the most hyped-up deals of the past year or so was DraftKings (DKNG), which debuted in April 2020 thanks to a finalized SPAC deal and has roughly quadrupled since.

So it's perhaps not surprising that Horizon Acquisition II (HZON, $10.18) has been generating buzz lately because it is reportedly combining with a related sports betting play, a Swiss sports data firm called Sportradar.

Wall Street types will recognize the SPAC's founder, Todd Boehly, as the former president of asset manager Guggenheim, but sports fans might also know him from being a co-owner of the Los Angeles Dodgers.

There's obvious logic to a deal like this, given the huge success of DraftKings and Boehly's experience. But even if the Sportradar deal somehow falls apart before it goes live, it's reasonable to expect Horizon to continue pursuing something in this general ballpark.

• IPO date: Nov. 24, 2020
• Capital raised: $115 million

After raising $115 million in a November IPO, Kingswood Acquisition (KWAC, $10.09) has been rumored to be pursuing a merger with Lombard International, a Blackstone-backed financial enterprise that is one of the largest wealth management firms in the United Kingdom.

This makes perfect sense, as the sponsors of this SPAC are private U.K. investment company KPI, which commands $8 billion of assets under management, and London-based independent alternative investment management company Pollen Street Capital, which has $3.5 billion in AUM.

With an executive team that is composed of mainly financial and investment types, it's understandable they would focus on this sector, and particularly at a firm such as Lombard that is so close to home.

It's not as flashy as the tech-focused members of this SPAC list, but a deal to mash up investment managers provides obvious efficiencies and economies of scale that could pay off for investors.

• IPO date: Dec. 17, 2020
• Capital raised: $374 million

Marquee Raine Acquisition (MRAC, $9.95) is another SPAC looking at acquisition opportunities in interactive entertainment, sports and gaming.

Backed by Marquee Sports Holdings, the owner of the Chicago Cubs' regional sports network, and merchant investment bank Raine Group, the leadership of this blank check company has experience in the high-growth potential of digital media but also the nitty gritty of sports management, including a high-profile renovation of the iconic Wrigley Field.

It's also worth noting that there's knowledge well beyond Chicago sports here, with a management team that includes Tom Ricketts, a director at TD Ameritrade, and Matt Maloney, the founder of food delivery app Grubhub (GRUB).

In early April, Bloomberg reported a rumor that MRAC could be in talks with Enjoy Technology Inc., a startup that has operated mobile retail stores for telecom and smartphone companies, hinting that Marquee could be casting a pretty wide net across the communications sector in the hunt for a target.

• IPO date: Sept. 30, 2020
• Capital raised: $330 million

Qell Acquisition (QELL, $10.15) is purportedly on the hunt for "a high-growth business in the next generation mobility, transportation or sustainable industrial technology sectors," according to SEC filings.

And with former General Motors (GM) North America CEO Barry Engle on its management team, it's clear that this SPAC is one of the top entities to watch for dealmaking in the e-mobility and logistics space.

After a December rumor hinted it was chasing electric bus and battery storage player Proterra, more recent rumors linked it to Lilium, a German flying taxi startup. And indeed, Lilium looks like it's just about set in stone, with the company reporting its intent to list on the Nasdaq via a merger with Qell, whose shareholders must still approve the transaction.

• IPO date: Dec. 18, 2020
• Capital raised: $225 million

Seven Oaks Acquisition (SVOK, $9.99) is a unique choice on this SPAC list for investors who want to see their portfolio reflect their personal value system.

Seven Oaks' S-1 filing states that "we intend to focus on opportunities aiming to make a positive social impact with a specific emphasis on good Environmental, Social and Governance ("ESG") practices."

The company has recently been rumored to be interested in online retailer Boxed that focuses on sending folks products in bulk – saving on fuel, packaging and other unfortunate side products caused by on-demand e-commerce in the age of Amazon.com (AMZN).

CEO and chairman Gary Matthews was previously CEO at IES Holdings (IESC) – an electrical, communications and home-security player – so Boxed's real-economy applications fit the kind of company Seven Oaks is likely looking for.

After all, you don't have to be the next big tech startup to simply find a better and greener business model.

First of all, if you are reading this for personal financial reasons, then congratulations. As a recipient of employer stock options, you have the opportunity to own shares of your company. Stock options can be a powerful wealth-builder. If granted, chances are you have a windfall headed your way. Be sure to have a plan in place regarding the exercise of those options and subsequent sale of stock.

There are several considerations that should factor prominently in your decision-making process. These actions may have major tax implications and, if done improperly, could effectively reduce the amount of that windfall.

When formulating a plan to exercise your stock options, there are some important questions to ask: What exactly is your stock option? When can you move on that stock? What are the tax implications? What valuation does your company have?

Stock Options

Understanding what type of stock options you own is significant when considering your financial position and determining your next move. Stock options come in a few varieties. Incentive stock options (ISOs) are a company benefit that give an employee the right to buy shares at a discounted price, while delaying taxes due until those shares are sold. With non-qualified stock options (NSOs) taxes are due both when you exercise the option (purchase shares) and sell those shares.

Another common employee compensation package is restricted stock units (RSUs). RSUs give an employee interest in company stock but have no tangible value until vesting is complete. It is important to know which type of options you have, and the implications of each.

Timing the Sale of Your Stock

Be sure to understand the earliest date at which your stock can be sold as a long-term capital gain. This tax-advantaged rate applies to stock held more than one year. Additionally, two years must have passed since the option to buy those shares was granted. Remember, you may have a post-IPO lockup period during which you will not be able to sell stock. A lockup period is a window of time when company insiders are not allowed to redeem or sell shares of their company. Lockup periods can vary but typically span six months post-offering.

A common strategy is exercising options six months before the IPO, which starts your stock holding period. Assuming a six-month lockup, any stock you sell thereafter will be taxed as a long-term gain, as you have now held the stock for one year. This strategy gives you flexibility to exit your position at the lower capital gains rate and earliest calendar date possible if you have concerns about your company’s prospects or need liquidity. On the contrary, if you think the stock could soar, you can hold it. Regardless, the early exercise of options gives you, well, options.

Plan Ahead for Alternative Minimum Tax Issues

If you exercise ISOs be aware of the rules surrounding the Alternative Minimum Tax (AMT.) The AMT applies to taxpayers with high income by setting a limit on deductions and exclusions. It helps to ensure that certain taxpayers pay at least a minimum amount of tax.

If you are subject to the AMT, exercising ISOs may count against you in the year in which they are exercised, so take into account the probability that your company will be successfully brought to market. Early exercise could negatively affect your balance sheet if the IPO is delayed or canceled and you were planning to pay that AMT with proceeds from the sale of stock to the public. For example, COVID-19 surely threw a wrench in the gears of recent IPOs such as Airbnb and likely in the plans of many executives standing to profit from it.

On the other hand, if you pay AMT on exercised ISOs when company stock is low, you may not get hit with it again after selling the stock at a later date. If it soars after the IPO, then exercising and paying AMT early would have been a smart move.

Valuation: Get an Idea of What Shares Are Worth

In the public stock market, there is a published bid-ask spread for each security throughout the trading day, thus providing a means of valuation for a stock or option. In the private marketplace, the valuation of a company is less clear because it is calculated infrequently. While there are some “exchanges” for private shares, transactions occur infrequently, and the bid-ask spread is often wide. You could certainly estimate based upon the most recent funding round or Venture Capital firm valuation.

Additionally, many private company values are based on the most recent 409(a) valuation. A 409(a) is an independent appraisal of the fair market value (FMV) of a private company’s common stock. Long story short: You can’t make a decision to exercise an option without understanding what a share of stock is worth.

Hire a Pro

DIY projects frequently end up costing a homeowner more money than just hiring a pro in the first place. As you review your stock options, it's important to consider all variables. Having a team of trusted advisers by your side who can properly evaluate your stock options, portfolio and goals can bring you confidence that you are making informed decisions.

A certified public accountant (CPA), a financial planner and estate attorney should be vital members of your decision-making team when navigating your ownership interests from private to public. A CPA can typically model your estimated tax liabilities given your unique circumstances. If your windfall is substantial enough, a financial planner and estate attorney will strive to ensure your wealth is preserved for yourself and future generations through proper planning. Be sure to hire the right person for the job — preferably someone who has dealt with the complex circumstances surrounding private stock, stock options and IPOs.

Every company is different, as is every IPO. It is important to read the fine print regarding your rights and requirements as the holder of options or stock in a private company before deciding what to do in the months before and after an IPO. If uncertain, be sure to consult professionals with experience in this area.

Content in this material is for general information only and not intended to provide specific advice, tax advice or recommendations for any individual. We suggest that you discuss your specific tax issues with a qualified tax adviser. Securities and advisory services offered through LPL Financial, a Registered Investment Adviser, Member FINRA/SIPC.

Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. Securities and advisory services offered through LPL Financial, a registered investment adviser. Member FINRA/SIPC.

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Airbnb's long-awaited initial public offering (IPO) is finally here.

The vacation rental company's offering, which hit the markets Thursday, is one of the hottest IPOs of the year, with many investors having waited years to get involved with one of travel's biggest names.

Read on as we tackle everything you need to know, including Airbnb's pricing, potential bullish catalysts and remaining hurdles.

Airbnb IPO: Quick Details

• About the company: Airbnb is an online marketplace for lodging, primarily used by people renting out their homes. Airbnb says it has more than 4 million hosts offering a wide range of experiences, from private single rooms in city downtowns to entire luxury villas on exotic islands. These stays are highly flexible, too, lasting anywhere between one day to several months.
• IPO date: Thursday, Dec. 10
• Valuation: $47 billion
• Listing price: $68 per share
• Fundraise amount: $3.7 billion
• Airbnb ticker: ABNB
• Exchange: Nasdaq
• Primary underwriters: Morgan Stanley, Goldman Sachs

The IPO That Almost Wasn't

The Airbnb IPO should cap an incredible turnaround from an existential crisis just months ago.

The COVID-19 pandemic hit much of the American economy, but perhaps no industry was hit as hard as travel. Revenues plunged across the board, from airlines and booking companies to restaurants and hotels.

Airbnb was no exception. Revenues for the nine months ended Sept. 30, 2020, sank by 32%, with most of the damage coming during the first and second quarters as site activity quickly dried up.

The company was forced to cut costs wherever it could. Airbnb laid off 25% of its global workforce, reduced executive salaries and slashed its sales and marketing budget, which dropped by 54% during 2020's first nine months.

Airbnb also scrambled to gather up $2 billion in debt financing in April via a pair of billion-dollar offerings just about a week apart.

But perhaps Airbnb's most important move was a business repositioning. That is, it pivoted to better cater to millions of Americans who suddenly wanted to focus on more domestic, close-to-home travel. From a June Airbnb post:

"Since the pandemic began, the percentage of bookings made on Airbnb within 200 miles, a round trip travelers can generally complete on one tank of gas, has grown from one-third of all bookings in February to over half in May."

But Airbnb finally looks like it's getting back on its feet.

2020's plunge in revenues included an 18% year-over-year decline during the third quarter. Nonetheless, Airbnb managed to post a profit of about $219 million – a rarity among technology IPOs.

In fact, that third quarter was even better than it might seem at first blush. During Q2, sales had plunged 72% to $335 million, and its net loss ballooned by 94% to $576 million. In other words, Q3's numbers represent a considerable turnaround.

Resiliency isn't a new look for Airbnb. The company's founders tried (and failed at) several businesses before coming up with the home-sharing concept … during the Great Recession. Airbnb also has dealt with a variety of crises, including PR hits from a string of home vandalizations, as well as multiple governmental actions slowing the company's business.

But Airbnb's leadership has seemingly always found ways to not just survive, but thrive.

The Bull Case for ABNB Stock

Whether you decide to buy the Airbnb IPO ultimately comes down to your own risk appetite and investing horizon. But we'll help you better understand some of the bullish and bearish drivers that will be pushing and pulling on ABNB stock.

Let's start with the pros:

• The Marketplace: As of Sept. 30, 2020, the company reported 7.4 million available listings, 5.6 million of which are considered active listings. That scale is more of an advantage than you might realize: Airbnb's marketplace has strong network effects, in that the more people who use it, the more powerful and useful its platform becomes. It's a trait shared by several leading online operators, including Facebook (FB), Alibaba (BABA) and eBay (EBAY).
• Organic reach: The company says that during the first nine months of 2020, 91% of all traffic to Airbnb comes through direct or unpaid channels.
• Economic improvement: Any advances against COVID-19 – specifically, potential vaccines from the likes of Pfizer (PFE) and BioNTech (BNTX), Moderna (MRNA) and others – are expected to be a boon for the entire travel industry, Airbnb included
• Market opportunity: Airbnb estimates the size of its total addressable market is a staggering $3.4 trillion. This includes $1.8 trillion for short-term stays, $1.4 trillion for travel experiences, and $210 billion for long-term stays and $1.4 trillion for travel experiences. There's plenty of room for multiple operators.
• The "Google" effect: Airbnb is beginning to become Google-fied, in that the word "Airbnb" is becoming a top-of-mind way people describe this new form of vacationing, even when they're not actually using Airbnb itself.
• The experience: Airbnb's service allows for more compelling experiences than the ordinary hotel room. It's described well in the S-1: "Instead of traveling like tourists and feeling like outsiders, guests on Airbnb can stay in neighborhoods where people live, have authentic experiences, live like locals, and spend time with locals in approximately 100,000 cities around the world."

The Bear Case for ABNB Stock

ABNB shares will face several risks, too, including:

• Legal uncertainty: While renting out one's home has been normalized thanks in large part to Airbnb, it's still not a settled area from a legal standpoint. And the powerful hotel industry lobby has been aggressively working to get municipalities to enact strict regulations against these kinds of home-renting services.
• Risks to hosts and guests (part 1): Hosts and guests alike take on numerous risks in these home-renting transactions. Airbnb admits that "there have been shootings, fatalities, and other criminal or violent acts on properties booked on our platform," as well as "sexual violence against hosts, guests, and third parties," and "undisclosed hidden cameras at properties." A growth in such issues could deter hosts from continuing to engage with the platform.
• Risks to hosts and guests (part 2): In many cases, hosts have made claims seeking compensation for a number of the violations committed against them and their homes. "These claims subject us to potentially significant liability and increase our operating costs and could materially adversely affect our business," the company writes.
• "Not in my backyard" (NIMBY): Some homeowners, landlords and home associations still are actively trying to ban services such as Airbnb.
• Competition: Airbnb must contend with online platforms such as Booking Holdings (BKNG), Expedia (EXPE) and Trip.com. It even faces competition from search engines and meta-search sites, including Google, Baidu (BIDU), TripAdvisor (TRIP) and Trivago (TRVG) that control huge amounts of web traffic. There are also competitors similar to Airbnb, such as Vrbo and Expedia's HomeAway. And of course, there's an entire hotel industry to deal with.

Cloud infrastructure unicorn Snowflake (SNOW) just executed a blockbuster initial public offering (IPO), and one of the beneficiaries is an unlikely investor.

Warren Buffett, chairman and CEO of Berkshire Hathaway (BRK.B), has never been a fan of IPOs. He's said so, on the record, and has notably turned up his nose at some of the most heavily hyped stock market debuts.

Furthermore, despite Apple (AAPL) being Berkshire Hathaway's single largest holding, Buffett has never really been all-in on technology stocks.

Yet he finds himself with a piece of the Snowflake IPO, which is the biggest software offering in history.

About the Snowflake IPO

Snowflake is a cloud-data warehousing company that plays in a roughly $55 billion annual market – a market that's expanding. The firm boasts 3,100 customers, 56 of which were each responsible for generating around $1 million in revenues within a 12-month period.

Snowflake is generating a lot of hype because it offers a way for companies to run their software on various cloud platforms, be they provided by Amazon.com (AMZN), Microsoft (MSFT) or Google parent Alphabet (GOOGL), to name just three.

As for the offering itself: Snowflake priced 28 million shares (listed under the ticker "SNOW" on the New York Stock Exchange) at $120 a share Tuesday night. That gives the company a market value of $33.3 billion – about as large as Capital One Financial (COF), Sysco (SYY) or MetLife (MET).

The deal raised $3.4 billion – not just the largest software offering ever, but also the biggest IPO period since Uber Technologies (UBER) raised $8.1 billion in May 2019.

Here's where Warren Buffett comes in:

Berkshire Hathaway agreed to buy $250 million in Snowflake stock in a private placement at the IPO price of $120 a share; cloud firm Salesforce.com (CRM) made a similar arrangement with Snowflake. The holding company also agreed to buy 4 million shares at the IPO price from Snowflake's former CEO Robert Muglia in a secondary transaction.

The bottom line? Berkshire Hathaway owned a $730 million stake in Snowflake before shares began trading Wednesday on the New York Stock Exchange.

It's a bet that's immediately paying off, too. Shares more than doubled when they finally started trading.

An Uncommon Buffett Investment

Investing in an IPO in this manner is essentially unprecedented in the history of the Berkshire Hathaway equity portfolio. Buffett notably skipped out on Uber's IPO last year.

"In 54 years, I don't think Berkshire Hathaway has ever bought a new issue," Buffett told CNBC at the time. "The idea of saying the best place in the world I could put my money is something where all the selling incentives are there, commissions are higher, the animal spirits are rising, that that's going to be better than 1,000 other things I could buy where there is no similar enthusiasm … just doesn't make any sense."

True, Warren Buffett's Berkshire Hathaway owned 14.2 million shares, or 8%, of all StoneCo (STNE) stock when the Brazilian financial technology company went public in 2018. But backing a company that later has an IPO isn't exactly the same thing as investing in a new issue as part of its process of going public.

Given Buffett's general aversion to technology stocks, the SNOW investment was likely the idea of one of his subalterns, Ted Weschler or Todd Combs. Buffett has made his ardor for Amazon.com and Apple clear, but that's because of their prowess in retail more than technology.

SNOW, meanwhile, as a cloud-infrastructure company, is about as "techy" as they come. The software firm also happens to offer a unique angle for those looking for a pure-play bet on the impressive growth of cloud services.

Regardless of where SNOW shares trade in the near term, Berkshire Hathaway's stake will still represent just a tiny part of its equity portfolio, accounting for perhaps 0.75% of its total holdings.

But it's an interesting bet nonetheless, and one that bears watching over the quarters ahead to see if Berkshire Hathaway adds to its position.

2019 was an explosive year for new stocks … for better, and for worse.

The year greeted a plentiful number of initial public offerings (IPOs) – 160, to be exact, that collectively raised more than $46 billion. That figure included numerous notable names, including Slack Technologies (WORK) and Pinterest (PINS). Saudi Arabia even got in on the action, listing the world's largest IPO as oil giant Saudi Aramco went public at a valuation of $1.7 trillion. For context, Apple (AAPL) – heretofore Earth's largest company – currently is worth $1.4 trillion by market value.

Should you buy new stocks? Well, for one, you might already own them, in one way or another. Pensions, mutual funds, even insurers invest in IPOs. But it's one thing to own a tiny percentage along with a giant basket of other stocks – it's another to buy a single IPO that could end up representing a few percent of your overall portfolio.

Still, these newly public stocks are often in their early growth stages, making them fraught with risk but also full of upside potential. It's often best to wait a few months after an offering to allow the initial hype to fade and allow Wall Street to focus more on the fundamentals, making now the best time to really start examining 2019's IPOs as prospective holdings.

Read on as we examine six new stocks: four that look like buys, and two that could have a bumpier road ahead.

Data is as of Jan. 29.

• Market value (Uber): $63.1 billion
• Went public: May 10, 2019
• IPO Price: $45.00
• Market value (Lyft): $13.9 billion
• Went public: March 29, 2019
• IPO Price: $72.00
• Uber Technologies (UBER, $36.99) and Lyft Inc. (LYFT, $46.84) represent a virtual duopoly in ride sharing and were two of the hottest new stocks to hit the markets in 2019. However, they also ended up being two of the biggest duds; Uber is off more than 21% from its IPO price, while Lyft has plunged by 35%.

As the gallows-humor Wall Street joke goes: If you liked them at their original prices, you'll love them now.

But seriously: If you want to speculate on ride sharing – and speculating is exactly what this still very new and evolving industry is – Lyft might be the better bet, for two reasons.

One is just a stronger financial situation. Lyft is sitting on about $3.1 billion in cash versus just $448 million in debt. Uber has roughly four times more cash, at $12.7 billion, but $7.5 billion debt – a far higher ratio. Uber's also absorbing higher net losses and burning through more cash than Lyft.

The other comes down to their exposure to ride sharing. Lyft is more of a pure play, while Uber is impacted by other initiatives such as Uber Eats, freight, bikes, even flying, not to mention trying to develop self-driving cars. Diversification can reduce risk, but for an as-yet unprofitable business model, diversification can compound losses, too.

"We see Lyft taking market share in the still nascent Mobility-as-a-Service space, with overseas expansion as a potential significant growth opportunity long term (currently operating in the U.S. and Canada only)," CFRA analyst Angelo Zino writes in a Dec. 14 report. "We like Lyft's initiatives and partnerships towards autonomous capabilities, which we forecast will be among the earliest adopters for this technology."

One small knock on Lyft: It sold Class A shares in its IPO that offer up one vote per share … but founders and other early investors' Class B shares are entitled to 20 votes per share. In short, you have less power to effect change than you do by owning Uber, which maintains a one-share, one-vote ownership structure. But that's not enough to make Uber worth a bite.

• Market value: $10.7 billion
• Went public: Feb. 8, 2019
• IPO Price: $14.00

Compared to the ephemeral technology products and services produced by many of the new stocks in the Class of 2019, Avantor (AVTR, $18.78) is an old-line industrial company that has been recalibrated to better tackle the needs of the 21st century.

Founded in 1904 as the J.T.Baker Chemical Company, Avantor services health care, technology and applied material markets around the world. In November 2017, Avantor acquired similarly positioned VWR, which accounted for the lion's share of its surge in sales – from about $1.2 billion in 2017 to $5.9 billion in 2018.

Credit Suisse analysts are looking for sales of $6.1 billion and adjusted profits of 55 cents per share for full-year 2019, up 4% and 38%, respectively. They also see the company growing the top and bottom lines by 5% and 36%, respectively in 2020. Avantor will be helped out by the elimination of duplicative costs as it integrates with VWR.

Shares are actually up by 34% from their IPO price, though it's been a roller-coaster ride that saw the stock pop after its opening, sink along with other new stocks during autumn when WeWork's implosion scared the IPO market, then return to an uptrend starting in November.

Credit Suisse thinks AVTR should maintain that trajectory. The firm has an Outperform rating (equivalent of Buy) and $20-per-share price target, implying modest gains from here. However, its "blue sky scenario" carries a $24 target premised on "better-than-expected synergy capture as it relates to the VWR International acquisition, continuing improvement efforts driven by its Avantor Business System, accelerated penetration and growth in emerging markets, as well as sustained strength in the Biopharma end-market."

• Market value: $12.4 billion
• Went public: June 12, 2019
• IPO Price: $34.00

You'd think investors would be pleased with CrowdStrike (CRWD, $60.26), whose current price is 77% higher than its IPO price. But remember: Retail investors typically don't get to buy in at the offer price – the large institutions that buy into the IPO do.

CrowdStrike finished up by more than 70% on its first day of trading, and that's much closer to the price many retail investors got. CRWD shares did blimp up to roughly $100 per share by August, but then plunged into the mid-$40s between then and November. The stock has been in recovery mode ever since.

CrowdStrike is not just a newly public company, but a young company in general. It was founded in 2011 to provide what is known as endpoint security, which focuses on shoring up a notable vulnerability by protecting all of the devices that connect to a network. It's a hot market.

Revenues have grown from $53 million in the fiscal year ended Jan. 31, 2017, to $250 million in fiscal 2019. CrowdStrike generated $329 million in the first nine months of fiscal 2020, which ends at the end of this January. But while the top line has been moving in the right direction, the bottom line hasn't. Net losses have widened from $91 million to $140 million between FY2017 and FY2019.

The analyst community expects continued losses over the next two years, albeit thinner ones. But remember: some money-losing companies can still act well as stocks.

Those same analysts are mixed on their opinions of where CRWD will go from here, split between seven Buys and six Holds over the past few months, according to TipRanks. However, Needham's Alex Henderson recently added the stock to the firm's Conviction List, writing that its growth is "delivering significant leverage to the business model." His $92 price target is one of the highest out there, and implies 53% upside ahead.

Just note that CrowdStrike, like Lyft, has a dual-class structure that puts most of the control in the founders' and early investors' hands.

• Market value: $11.3 billion
• Went public: June 14, 2019
• IPO Price: $22.00

Online pet food-and-products retailer Chewy (CHWY, $28.25), like Crowdstrike, was warmly received by Wall Street went it went public, jumping above $37 per share in its first few days of trading. But CHWY cooled significantly along with 2019's other new stocks, and has similarly rebounded since November.

The bigger-picture outlook is favorable. U.S. pet spending alone came to an estimated $75 billion in 2019, and is expected to keep growing by mid-single digits for the next couple of years. Moreover, about two-thirds of Chewy's sales come from repeat customers, which is easier on margins and says something about the company's ability to engender loyalty.

The question that Chewy, and every other retailer, faces is whether Amazon.com (AMZN) will steamroll it like it has so many others. True, Chewy sells 45,000 pet products, but a search on Amazon for pet supplies yields 90,000 results. Chewy CEO Sumit Singh countered the Amazon threat in a December interview with CNBC, saying, "We get numerous calls every day for customers asking us, 'I just brought home a puppy. What should I feed it?'" And Chewy uses those experiences to grow its customer relationships in a way that Amazon can't or won't.

True, if you call Amazon to ask what you should feed your puppy, you might not get an answer. But Singh's defense might be a trifle thin against a retail-killer like Amazon.

Chewy has reported torrid sales growth, though, from about $1.4 billion in the 12 months ended February 2017 to the 12 months ended February 2019. For the first nine months of its current fiscal year, sales were $3.5 billion, meaning the final quarter is all gravy in terms of sales growth. Its net losses haven't moved nearly in lockstep, more than doubling between 2017 and 2018, to $338.1 million, before shrinking to $267.9 million in the 12 months ended February 2019.

Profitability appears to rest on acquiring more customers and relying on the strong relationships that Chewy forms to get them to spend more, more often. That's a long, difficult road; even if Chewy eventually is successful, investors could be in for a rough ride for some time.

• Market value: $7.8 billion
• Went public: March 21, 2019
• IPO Price: $17.00
• Levi Strauss (LEVI, $19.80), which makes a relatively boring product (casual wear), is nonetheless a refreshing drink of water compared to some of 2019's new stocks. Namely, it's soundly profitable, and it even pays a 3% dividend.

It's not a rapid grower. Revenues climbed just 7% annually between the 12 months ended November 2015 and the 12 months ended November 2018. But profits improved by more than 10% on average over the same time period. For the year ended November 2019, to be reported after the Jan. 30 bell, Value Line is forecasting sales of about $5.9 billion, or 6% year-over-year growth.

In October, Macquarie analyst Werlson Hwang initiated coverage of Levi Strauss with a Buy rating and a $23 price target. Hwang cited several bullish drivers, including a clean balance sheet, commitment to innovation and a track record of staying relevant with consumers – a particularly valuable trait for an apparel company.

And in December, JPMorgan analyst Matthew Boss maintained an Overweight rating (equivalent to Buy), saying "We view the combination of a strong tenured management team and brand heritage as a competitive advantage in transitioning Levi's from a Jeanswear brand to a leading global lifestyle brand."

A $22 price target implies 11% upside from current prices. Hwang's PT leaves room for 16% growth. The consensus price target of $23.67 is more optimistic, at almost 20%, but clearly, the analyst community has more modest expectations of LEVI than other new stocks from the Class of 2019. If your goal is a mix of income and growth, however, LEVI should do the trick.

Levi does share one thing in common with some of its more modern IPO peers: a dual-class structure that gives voters no say in corporate governance. The Haas family, which descended from Levi Strauss, maintains complete control over the company.

Fans of initial public offerings (IPOs) have gotten one flashy deal after another in 2019. Some companies such as Beyond Meat (BYND) shocked onlookers with a meteoric ascent, while other hotly hyped companies such as Uber Technologies (UBER) crashed and burned early on. But broadly speaking, there’s demand for IPOs, and up-and-coming companies are happy to fill that demand.

“IPO activity is (mildly) cyclical, as management teams take the opportunity to go public while being buoyed by favorable economic conditions,” Bernstein equity strategist Noah Weisberger told CNBC in explaining this year’s red-hot IPO market.

It’s early going for these new stocks, however. They have only a few months of trading under their belts, and very little financial track record to go on. With so little information at their fingertips, investors must rely heavily on Wall Street’s analysts for insights into the comings and goings of these IPOs.

Here are 10 recent higher-profile IPOs, and what analysts are saying about each of these new stocks.

Data is as of June 25.

• Market value: $73.1 billion
• TipRanks consensus price target: $53.48 (24% upside potential)
• TipRanks consensus rating: Strong Buy
• Uber Technologies (UBER, $43.09) was one of the most highly anticipated IPOs on the calendar, but its May offering was a massive flop. Some hailed it as the most disappointing IPO since Facebook (FB) went public in 2012.

“The timing of our IPO was very much aligned with our president’s tariff wars, the same day,” CEO Dara Khosrowshahi said at the Economic Club of Washington. “So I think we got caught up a bit in the market swirl.”

Uber raised $8.1 billion in its early May IPO and opened trading at just $42 per share, down from its IPO price of $45. Despite this conservative starting point, shares continued to slide during their first trading day and closed at just $41.57. Khosrowshahi even had to reassure employees that “Facebook and Amazon post-IPO trading was incredibly difficult for those companies” as the company’s new stock continued to fall the next day.

Shares have recovered a little since then. And for some, Uber is a compelling investing proposition because shares haven’t run up to sky-high valuations so quickly after the offering.

Top-rated SunTrust Robinson analyst Youssef Squali describes Uber as “a generational company compounding at scale.” “Uber is capitalizing on powerful secular trends around the improving technology/ubiquity of personal mobile devices and ever-advancing consumer preferences, to transform a very large but highly inefficient transportation market,” writes Squali, who also points out that Uber dominates ridesharing (outside of China) and has used its scale to grow both Uber Eats and Uber Freight.

Wedbush’s Ygal Arounian, who has an “Outperform” (equivalent of “Buy”) rating and a $65 price target on Uber stock, says the company has the DNA to become a game-changing consumer distribution ecosystem over the coming years. He also dismisses concerns about the departures of COO Barney Harford and CMO Rebecca Messina, announced on June 7. “In the near term we believe this move is better to happen sooner rather than later,” he writes. “By having the leadership teams of rideshare and Eats report directly to (Khosrowshahi), Dara and Uber are more clearly focusing on optimizing the full consumer value proposition …”

Uber boasts a “Strong Buy” Street consensus, with 21 “Buy” ratings versus just five “Holds.” See what those other top analysts have to say about UBER on TipRanks.

• Market value: $10.0 billion
• TipRanks consensus price target: $20.62 (10% upside potential)
• TipRanks consensus rating: Strong Buy
• Avantor (AVTR, $18.70), a chemical maker in the life sciences industry, is a “smid-cap” (on the border of small and mid) stock to put on your investing radar. Avantor – formed by the 2017 merger of Avantor Performance Materials and VWR – serves attractive and relatively defensive addressable markets worth roughly $70 billion.

Avantor made the move from private to public in mid-May. The company sold 207 million shares priced at $14 per share, generating $2.9 billion. Shares closed their first day slightly higher, at $14.50, though the stock has been much more impressive since then, surging 29% to current share prices.

The Street broadly thinks AVTR is worth buying into, with 13 out of the 15 analysts covering the stock leaning bullish (the other two are on the sidelines).

Merrill Lynch analyst Derik De Bruin is in the bull camp. His Street-high price target of $22 indicates upside potential of 17%. “We believe the combined company is better positioned competitively than the standalones, and poised to deliver higher growth and profitability,” he writes. De Bruin believes Avantor can “steadily grow revenues in line with or even modestly better than its LST peers, expand margins, reduce debt, and deliver a 10% EPS CAGR over the next three years.”

What are other financial experts saying about this global life sciences manufacturer and distributor? Find out on TipRanks.

• Market value: $14.2 billion
• TipRanks consensus price target: $28.62 (9% upside potential)
• TipRanks consensus rating: Moderate Buy

Popular photo-sharing website Pinterest (PINS, $26.14) made its debut on the New York Stock Exchange back in April. Unlike many other social media platforms, Pinterest focuses on enabling visual inspiration rather than talking to friends or following celebrities.

This strategy has resonated with investors, who drove PINS shares from an IPO price of $19 to $23.75 on their first day of trading. The stock has trudged forward to current prices from there, and in fact is coming close to the average analyst target price. In fact, most analysts covering the stock are taking a wait-and-see approach, with 13 “Hold” ratings versus just 5 “Buys.”

“While we find Pinterest’s visual discovery platform truly unique and its mid-to-low funnel return prospects for advertisers promising, we also acknowledge an incredibly competitive digital ad marketplace and daily time spent on social platforms nearly maxed out,” Rosenblatt Securities analyst Mark Zgutowicz writes.

He initiated PIN with a “Neutral” rating (equivalent of “Hold”) and a $32 price target, although this has since been lowered to $28. The analyst cited higher investment and ARPU (average revenue per user) growth deceleration as the reason behind the price downgrade.

Looking forward, analysts are also keeping a close eye on the company’s sizable international opportunity. However, as Zgutowicz cautions, new local branding and sales efforts will take significant time and investment before PINS will be able to reap the rewards. See why other top analysts have a cautiously optimistic outlook on Pinterest.

• Market value: $9.1 billion
• TipRanks consensus price target: $41.82 (2% upside potential)
• TipRanks consensus rating: Hold

Bank-backed trading platform Tradeweb Markets (TW, $41.09) raised $1.1 billion in its April IPO. The financial services company sold 40 million shares at $27 each, beating its initial target price of $24-$26. Shares opened at $37.26 and have advanced even more since then.

But at the moment, analysts don’t see much growth from here.

Wall Street’s consensus price target sits just 2% higher from current prices. Meanwhile, 10 analysts have a “Hold” rating on Tradeweb, against just two “Buys.” Several pros are staying on the sideline because of a high valuation.

Barclays analyst Jeremy Campbell writes, “Valuation is the crux of our Equal Weight rating as we love the electronification of fixed income theme, but feel that TW shares fully reflect the most likely growth scenario.” Indeed, Campbell’s $39 price target implies 5% downside potential. He praises TW’s diversified business model (40-plus products) but adds that “Greater penetration in electronic credit would get us more bullish.”

Raymond James’ Patrick O’Shaughnessy delivers a similar message. Despite calling the company “attractive,” the analyst initiated coverage on TW with a “Market Perform” rating (equivalent of “Hold”) due to its premium valuation. And Morgan Stanley’s Michael Cyprys advises investors to wait for a better entry point before snapping up TW stock. For further insights into this stock, check out TW’s analyst page at TipRanks.

• Market value: $8.1 billion
• TipRanks consensus price target: $24.67 (19% upside potential)
• TipRanks consensus rating: Moderate Buy

Jeans aren’t traditional trading-floor attire, but that wasn’t the case when denim giant Levi Strauss (LEVI, $20.75) returned to the market on March 21. At its 2019 IPO, Levi sold $623 million worth of shares at a price of $17 per share, beating the initial target of $14-$16. Shares exploded 30% to open at $22.22.

Traders wore blue jeans to celebrate the occasion.

The stock has since remained relatively rangebound, however, and analysts are divided about whether you should buy now, creating a consensus “Moderate Buy.” Three analysts call LEVI a “Buy,” while three rate it a “Hold.” But if we look at only top-rated analysts, that consensus shifts to a more bullish “Strong Buy.”

Five-star Guggenheim analyst Robert Drbul has just initiated coverage with a “Buy” rating and $26 price target. He calls this a “rivet-ing growth story,” writing, “Levi’s is a company with a very rich heritage ... and today benefits from a high-quality, deep, and experienced management, led by CEO Chip Bergh and CFO Harmit Singh. As numerous growth strategies implemented by this team take hold, we foresee continued market share gains across apparel, globally, alongside improving profitability.”

He cites numerous recent collaborations by Levi’s, such as with KITH, Supreme, Off White and Justin Timberlake, as well as marketing initiatives with Alicia Keys and partnerships with influencer-dominant events such as Coachella. These “speak to the significant brand equity management underway at Levi’s,” Drbul writes. Discover how the stock’s ‘Moderate Buy’ consensus breaks down on TipRanks.

• Market value: $18.6 billion
• TipRanks consensus price target: $70.25 (10% upside potential)
• TipRanks consensus rating: Moderate Buy

Uber isn’t the only ride-hailing service to hit the markets in 2019. Lyft Inc. (LYFT, $64.04) actually executed its IPO two months earlier, in late March, with shares priced at $72. Unfortunately, shares have pulled back considerably since then, with experts pointing to Lyft’s service’s deep unprofitability.

But it’s not all doom and gloom. “We believe the competitive environment is likely as favorable as it’s ever been in the [about] 7 years of ridesharing, with record low incentives for drivers and riders,” JPMorgan’s Doug Anmuth writes.

“Importantly, as price competition & couponing ease, we believe Lyft can extend its share gains based on its singular focus on [transportation as a service] and ongoing product innovation.” The five-star analyst has a bullish $86 price target on Lyft, implying upside potential of 34%.

Analysts as a whole are mixed on LYFT right now, however, giving it a “Moderate Buy” consensus rating. Yes, 19 analysts rate it a “Buy,” but eight have it at “Hold” and three call it a “Sell.”

Top-rated Susquehanna analyst Shyam Patil has just upgraded Lyft from “Hold” to “Buy” and lifted her price target from $57 per share to $80. Lyft has a “a strong #2 market presence,” he writes, and a savvy “longer-term transportation-as-a-service vision.”

“With the US rideshare market becoming more rational, LYFT showing clear evidence of marketing and insurance cost leverage, and UBER’s IPO out of the way, this is the time to buy the stock,” Patil concludes. See what other top analysts have to say about LYFT on TipRanks.

• Market value: $23.2 billion
• TipRanks consensus price target: $84.50 (1% downside potential)
• TipRanks consensus rating: Moderate Buy
• Zoom Video Communications (ZOOM, $85.03) provides remote video conferencing services using cloud computing. What sets Zoom apart is that this recent IPO has already managed to turn a profit – many new stocks come to market representing money-losing operations.

Perhaps that’s why the company delivered a remarkable offering, with shares exploding more than 70% on the first day of trading. Indeed, Zoom has more than doubled its $36 IPO price thanks to stellar financial results. In its most recent quarter, revenues more than doubled and were 9.2% better than forecasts, while profits beat expectations by 2 cents per share. It also forecast 74.4% year-over-year sales growth in its current quarter.

“Clearly ZM has brought to market a highly differentiated and disruptive product, enabled by a sound go-to-market strategy,” Northland Securities analyst Ryan Koontz writes. “The company has high inspirations to revolutionize the way people communicate and we are enthused by the company’s market momentum and strong execution out of the gate.”

However, Zoom’s strong growth has placed the stock at a crossroads. ZM has exceeded the analyst consensus price target, meaning we’ll want to see whether analysts keep pushing their estimates forward … or think Zoom has climbed all it will climb for the moment. It seems the latter, as the stock boasts 10 “Hold” ratings versus just four “Buys.”

He explained: “We are bullish on the company’s ability to execute but we view the stock as fully or over-valued since its since its IPO on April 18,” Koontz wrote after the company’s Early-June earnings report. Find out how the Street’s average price target for ZM breaks down.

• Market value: $2.93 billion
• TipRanks consensus price target: $22.31 (16% upside potential)
• TipRanks consensus rating: Moderate Buy

Welcome to the biggest energy IPO of 2019 so far. Rattler Midstream LP (RTLR, $19.29) raised $665 million in May, easily surpassing the gains for both Brigham Minerals (MNRL) and New Fortress Energy LLC (NFE). The company sold 38 million shares at $17.50 each; shares have gotten some more lift since then.

Rattler is a pure-play Permian Basin midstream company backed by top-tier Permian Basin exploration-and-production pure-play Diamondback Energy (FANG). It provides Diamondback with crude oil, natural gas, and water-related midstream services. And Diamondback continues to hold 71%-75% of RTLR shares following the offering. Northland Securities’ Jeff Grampp is optimistic about the company’s prospects, writing: “RTLR has a strong organic growth outlook ... that we believe is relatively low-risk given FANG’s operational track record, low-cost operations and healthy balance sheet.”

The key selling point for Rattler is its FANG exposure. As Grampp writes, this gives Rattler a relatively lower-risk growth profile versus its midstream peers, with growth supported by FANG’s deep drilling inventory (around 25 years of Tier 1 locations). Dividend investors also have something to look forward to. As the analyst points out, Rattler currently pays a lucrative 5%-plus dividend yield with payout-growth potential too.

RBC Capital’s Tim Schultz says the premium valuation is keeping him on the sidelines, but nonetheless highlights the company’s strong 2019 estimated production growth of 26%. Overall Rattler shows a cautiously optimistic “Moderate Buy” analyst consensus. What are other financial experts saying about this intriguing FANG subsidiary? Find out on TipRanks.

• Market value: $9.1 billion
• TipRanks consensus price target: $108.50 (28% downside potential)
• TipRanks consensus rating: Hold

Fake-meat stock Beyond Meat (BYND, $150.60) has enjoyed an eye-watering rally since its IPO. Shares have exploded by roughly 500% from its IPO price of just $25 per share – including a 163% initial pop that represented the best first day of trading for any company in nearly two decades. The result: Some lucky investors have reaped massive rewards, and short sellers have lost an eyewatering $560 million according to data analytics firm S3 Partners.

But analysts think investors should avoid chasing the stock at this point. All seven analysts covering Beyond Meat rate the stock a “Hold,” and the current price target implies a plunge of nearly 30% in coming months.

Both Bernstein’s Alexia Howard and JPMorgan’s Kenneth Goldman recently downgraded BYND from “Buy” to “Hold.” Howard is stepping to the sidelines “as the stock has traded in a highly volatile manner since its IPO likely due to its limited public float.” She noted that the stock’s enterprise-to-value sales relative to potential sales implied “limited upside potential from a valuation perspective.”

But Howard is optimistic about Beyond Meat’s prospects. “We continue to expect significant growth potential in the plant-based meat category and believe that Beyond Meat is well positioned as one of the front-runners leading the new wave of plant-based meat products,” she writes.

Goldman’s downgrade was a “purely valuation call.” He had previously warned investors that he would downgrade the stock when BYND’s valuation exceeded the company’s “extraordinary” money-making potential, and “We think this day has arrived.” Indeed, his $121 price target now suggests about 20% downside potential lies ahead. Discover how the overall price target breaks down on TipRanks here.

• Market value: $590.6 million
• TipRanks consensus price target: $35.75 (28% upside potential)
• TipRanks consensus rating: Strong Buy
• TransMedics Group (TMDX, $28.00) has created a groundbreaking portable device that maintains donor organs in a human-like state. In May, the company reaped $105 million after selling 6.55 million shares at $16, the midpoint of its targeted price range. This included an underwriters’ option that was exercised in full. Shares subsequently gained 40% on the first trading day to close at $22.36.

Analysts, who give it a consensus “Strong Buy” rating, think this could be just the start of the company’s blockbuster story.

“We initiate coverage of TransMedics with an Overweight rating and $34 December 2019 price target, as the company is set to revolutionize the organ transplant market using its Organ Care System, or OCS,” writes top-rated JPMorgan analyst Robbie Marcus.

The current standard of care uses the equivalent of an ice cooler for organ storage during transportation, and OCS is ready to disrupt this, Marcus says. Not only does it maintain the organs in a near-physiologic state, but it also allows doctors to optimize and assess the organs pre-implantation. Marcus anticipates a total market opportunity exceeding $7 billion for today’s pipeline products alone.

Cowen & Co.’s Joshua Jennings is even more optimistic on the size of the opportunity, writing, “We believe TransMedics is filling a unique white space in transplant medicine and creating an $8B market. With multiple clinical and operational catalysts on the horizon, we expect OCS adoption and utilization trends to soon hit an inflection point.” See why other top analysts are also bullish on TransMedics.

Harriet Lefton is head of content at TipRanks, a comprehensive investing tool that tracks more than 5,000 Wall Street analysts as well as hedge funds and insiders. You can find more of their stock insights here.

The market for initial public offerings (IPOs) in 2018 saw 190 companies take the plunge, raising $47 billion in collective proceeds. That IPO tally was higher than the 160 offerings in 2017, and far better than the 105 in 2016.

That’s the good news. The bad news is that activity came to a grinding halt in the final two months of the year. IPO pricings fell 66% after Nov. 1, throwing cold water all over the market for IPOs heading into 2019.

“The fact that the market is shaky right now, if it stays that way, we will see discounts to get deals done. It is amazing Tencent (Music) pulled off its IPO,” Kathleen Smith, principal at IPO specialist Renaissance Capital, told CNBC in mid-December. She also said the online music platform priced at the bottom of its $13-15 range, “and maybe it should have priced below its range, based on how it is trading.”

On top of that, the partial federal government shutdown could delay some of the most hotly anticipated IPOs on investors’ watch lists in 2019. That’s because many workers that review such documents haven’t been allowed back to their desks.

Despite all this, 2019 could be a big year for initial public offerings. While the total number could be down, there are some potentially explosive offerings on the horizon, and a couple of CEOs have recently affirmed that their IPOs still are on track.

Here, we look at the 11 hottest IPOs to watch for in 2019. In some cases, the companies have filed official paperwork for an offering. In others, experts are anticipating a 2019 offering based on company statements or actions.

Potential valuations have been gleamed from a variety of analyst estimates and might not reflect the actual valuations of the companies discussed by the time they execute their IPOs.

• Potential valuation: $120 billion
• Uber, which filed its paperwork in December, is arguably the most anticipated IPO to watch in 2019, and it could also be the year’s most prominent and most valuable.

The biggest problem Uber will have going public in 2019 isn’t that it’s an unknown commodity, but rather that the lengthy bull market appears to be coming to an end at precisely the same time as the U.S. economy is softening. These aren’t great selling features for any IPO, let alone one that could value the ride-sharing business at $120 billion.

It has taken Uber a decade to get from fledgling startup to global ride-sharing powerhouse with 75 million riders, 3 million drivers and an estimated 15 million trips completed daily. Over the years, it has raised more than $24 billion in funding. But although the company had little problem finding private investors, the liquidity provided by an IPO is attractive.

“The public market provides greater liquidity,” Matt Pencek, director of IPO consulting firm MorganFranklin Consulting, recently told Vox. “The difference between public and private is like owning a home but being told you have to wait for a buyer to come to you, or that you can only sell your home to a few people every few years.”

Uber is a company with a troubled past that needs an IPO home run to erase some of the bad memories. We’ll know soon enough if it succeeds.

• Potential valuation: $41 billion
• Palantir Technologies could be 2019’s most secretive entrant in the IPO sweepstakes.

Palantir, co-founded by Peter Thiel – who co-founded PayPal (PYPL) and was an early investor in Facebook (FB) – could be ready to take the long walk down the IPO runway.

Palantir uses artificial intelligence and machine learning to help organizations, many of them in law enforcement, analyze and understand large quantities of data. The company was founded in 2004 by CEO Alex Karp, Thiel – Karp’s Stanford Law School classmate – Nathan Gettings, Joe Lonsdale and Stephen Cohen.

Palantir isn’t without a little controversy. In a recent Wall Street Journal profile of Karp, the newspaper called the CEO a “self-described socialist,” though that runs in complete contrast to the company’s work, which has included analyzing data for predictive policing programs. (A Rand Corporation study of such programs in Chicago found they often led to the increased surveillance and arrest of people of color.)

According to reports in September, Palantir looked to favor Morgan Stanley to be its top adviser, looking out to late 2019 or early 2020 for its offering. Morgan Stanley helped the company find private investors, and its understanding of government-backed entities makes it a natural choice. However, in November 2018, Bloomberg reported that Palantir was bickering with Morgan Stanley over its valuation of the company.

Karp did say recently, however, that he doesn’t expect the government shutdown to affect his company’s IPO plans.

• Potential valuation: $31 billion

How do you know a private company is thinking of going public? It hires a chief financial officer with public company experience.

So, when Airbnb announced Nov. 26 that it had hired Dave Stephenson as its CFO after a 10-month search, you just knew the IPO speculation would heat up. Stephenson, who spent 17 years at Amazon.com (AMZN), was most recently VP and CFO of Worldwide Consumer Organization, Amazon’s unit responsible for all its global website sales. He also helped integrate both the Zappos and Whole Foods acquisitions.

“Dave is one of the best financial operators in the world and there’s no one better prepared to serve as our CFO,” Airbnb CEO and co-founder Brian Chesky said in a November statement. “Dave will be Airbnb’s quarterback for long-term growth, driving us to be even more efficient and leverage what makes Airbnb unique to create new businesses and continue to expand.”

Another indication Airbnb is laying the groundwork for a 2019 IPO? It revealed some of its financial numbers for the very first time in mid-November. For example, in the third quarter, it generated more than $1 billion in revenue for the first time. In 2017, it made $100 million from $2.6 billion in revenue. Airbnb expects to deliver a second consecutive year of EBITDA profitability in 2018.

One last hint: The company reportedly held talks to possibly acquire hotel-inventory seller Hotel Tonight. Those talks ended up bearing no fruit but could indicate that Airbnb is looking for ways to entice potential IPO investors.

• Potential valuation: $15 billion-$30 billion

Whether it’s the competition between Lyft and Uber to get the most users for its ride-sharing apps or the race to get to the IPO finish line first, both companies are determined to be the ultimate winner. Lyft did beat Uber in one respect already, however, confidentially filing its paperwork Dec. 6 – a day before Uber did.

Uber currently has a 60% market share compared to 23% for Lyft, according to a Raymond James survey of 1,062 Americans. However, that same study found that Lyft drivers were friendlier and customers more loyal. “While Lyft trails Uber in share, it does have a highly engaged user base – we found that Lyft users actually use the service more frequently than Uber users,” the report said.

That at least suggests Lyft might end up being the more popular IPO.

Interestingly, the report also found that only 58% of respondents have used a ride-hailing app, which suggests both Lyft and Uber should be able to continue growing at a double-digit pace.

What should attract investors to Lyft relative to Uber is that it has been growing faster. Between 2014-17, Lyft increased revenues by 223% compounded annually, compared to 146% for Uber.

“In the long run, Uber might take the lion’s share of capital in the category,” Duncan Davidson, the co-founder of Bullpen Capital, a San Francisco-based venture capital firm, told Yahoo Finance in November. “But if I was a normal investor I’d go into Lyft … there’s more upside being smaller.”

• Potential valuation: $12.3 billion
• Pinterest chose to bring in a heavy hitter to handle the company’s investor relations as it gears up for a 2019 IPO, hiring Jane Penner in November.

Penner was the head of investor relations at Alibaba (BABA) when it raised $25 billion in its 2014 initial public offering. Before her work at Alibaba, she was the head of investor relations at a little company called Google, now known as Alphabet (GOOGL).

You don’t hire someone of Penner’s caliber if you’re not getting ready for an IPO.

A further indication the company is preparing to raise money in the public markets: It hired Andréa Mallard as the company’s chief marketing officer in November. Mallard is the former CMO of Athleta, Gap’s (GPS) growth brand.

Pinterest generated $500 million in revenue in 2017 and was expected to almost double that in 2018. Pinterest, which has become the social media app of choice for people looking to find and shop for products, now has 250 million users, 25% higher than a year earlier.

It could be one of the earlier IPOs to watch on this list – a Dec. 19 Wall Street Journal report said Pinterest’s offering could come as soon as April, citing people familiar with the company’s plans.

• Potential valuation: $8 billion

Once Amazon bought Whole Foods in June 2017, it was only a matter of time before Instacart’s partnership with the premium grocery store, which began in 2014 with so much promise, was destined to end. In December, Instacart officially announced the end of its partnership, putting 350 shoppers (the people who pick the products off the Whole Foods shelves) out of work while another 1,000 will be offered shopping roles at some of its other partners including Publix and Albertsons.

The company was founded in 2012 by CEO Apoorva Mehta, who worked at Amazon between 2008-10. And Mehta sees an IPO in the company’s future despite the Whole Foods setback.

“An IPO is definitely on the horizon for us,” Mehta recently told CNN Business. “As we think about building a long-term company, we think being a public company allows us to do that in the best possible way.”

This past November, Instacart raised $271 million in funding, valuing the six-year-old company at $8 billion. An early investor in the grocery delivery startup was Sequoia Capital, whose successful investments include Dropbox (DBX) and Airbnb; more importantly, it was an early investor in WebVan, a grocery delivery service that failed because it grew too fast.

A lot has to happen for Instacart to do an IPO in 2019. If it does, expect it to price in the final quarter of the year.

• Potential valuation: $3 billion

Although cybersecurity software maker CrowdStrike has hired Goldman Sachs to get it ready for an IPO in the first half of 2019, it’s possible that the company sells itself to a more significant player before even getting to the starting line.

Earlier in 2018, CrowdStrike CEO George Kurtz appeared on CNBC to talk about his company’s place on the network’s Disruptor 50 list. He wasn’t shy, suggesting someone like Amazon.com could be very interested in its cloud-based endpoint security platform, which protects remote devices from being accessed by a third party.

“(Amazon) is a big partner,” Kurtz stated May 24. “We actually supply some of the intelligence for some of the services behind Amazon, which is their GuardDuty service, so it’s worked out quite well so far.”

A recent example of a company selling just before going public is Qualtrics, which sold itself to SAP SE (SAP) in November for $8 billion after filing for an IPO in October. By avoiding the offering, the maker of survey software tools made its investors a few extra billion dollars on their investment.

• Potential valuation: $550 million
• Beyond Meat might not be a tech IPO, but you can be sure that most investors will be familiar with plant-based food company’s story.

First of all, its list of investors is second to none: Bill Gates, Leonardo DiCaprio, Kleiner Perkins, Twitter (TWTR) co-founder Evan Williams and Tyson Foods (TSN).

Why would Tyson Foods, one of the biggest producers of meat on the planet, invest in a plant-based business? Because it makes good business sense.

“We’re so big that the industry can’t change if we don’t lead,” Tyson CEO Tom Hayes said in an August interview.“We want to actively disrupt ourselves. We don’t want to be Kodak.”

The second reason investors have heard about Beyond Meat is the incredible success of its meatless burger with various restaurant chains across the country, including TGI Friday’s, Twin Peaks, Veggie Grill and many more.

“It’s only the beginning,” Caroline Bushnell, the Good Food Institute’s senior marketing manager, said in December. “We’re in the early stage of a major shift. Companies are realizing that the market for plant-based meat isn’t just vegans or vegetarians, it’s meat-eaters.”

Beyond Meat filed in November 2018 and expects to price its shares very early in 2019. The star power and company potential could result in an oversubscribed IPO.

• Potential valuation: $469 million
• Gores Metropoulos – one of the few non-tech IPOs on this list – is a “blank check” company formed between Alec Gores, CEO of Los Angeles-based private equity firm The Gores Group, and Dean Metropoulos, the man behind the revival of Hostess Brands (TWNK).

If you’re not familiar with blank check companies, also known as SPACs, they bring together management with particular expertise – in this case, it’s consumer products and services – to raise a set amount of money it uses to acquire an operating company in this field.

By the rules, it must put the funds raised, less a small amount, to use in the search and due diligence process in a trust account that pays interest. Also, it must complete an acquisition within 24 months of the offering’s closing. If they don’t, the funds are returned to investors with interest.

Blank check companies, as investments, became popular with hedge fund managers in 2008 when the markets were tanking because they provided an excellent place to park cash in a down market.

Generally, a blank check company is only as good as the management team involved. With Gores and Metropoulos leading the way, it is likely they will get an acquisition done before the end of the 24 months.

The company filed Dec. 11, with plans to raise $375 million (37.5 million units at a price of $10).

• Potential valuation: N/A

While Virgin Trains USA could be the most speculative of the 2019 IPOs mentioned in this article, the mere fact that Richard Branson’s name is attached to the November filing should be enough to pull in a few investors.

Virgin Trains USA, formerly known as Brightline, operates train service between Miami and West Palm Beach with construction underway to expand service to Orlando and Tampa.

In November, it announced a partnership with Virgin Enterprises – which operates train service in the U.K. and had 38 million passenger trips in its latest fiscal year – providing the company with an experienced partner for growing its business outside of Florida. As part of the partnership, Brightline was renamed Virgin Trains USA, which should attract more customers to its Miami to Palm Beach service.

In the future, Virgin Trains USA seeks to add routes of 200 to 300 miles that are too short to fly and too long to drive. Up first is a route between Victorville (in southern California) and Las Vegas. Other potential routes include Portland to Vancouver, Dallas to Houston, and Atlanta to Charlotte.

Building new passenger rail lines isn’t cheap. For example, the expected cost of the Las Vegas route is $3.6 billion. Investors can expect operating losses for several years, if not a decade or more. But if you believe in rail travel being a solution to America’s car problem, Virgin Trains USA’s IPO could be just the ticket.

The IPO is expected to raise $100 million, but so far, there is no reliable estimate on company valuation.

• Potential valuation: $10 billion

The workplace messaging app Slack likely is going public in 2019, though Bloomberg reported this year that it’s planning to list its shares directly with investors, rather than using an underwriting syndicate to find the buyers. What’s interesting is that Bloomberg also reported in December 2018 that Slack had hired Goldman Sachs to lead its underwriting team – a move that, at the time, would’ve suggested a traditional IPO.

The consensus is that enterprise startups make bad candidates for direct listings because not enough investors are aware of the company’s products or services because they’re sold to other companies and not the general public. But many people have used Slack’s messaging app – it has 8 million daily active users – and doesn’t really need a primer on what the company does or why its shares are worth owning.

Whenever Slack goes public, it will have its hands full with some much larger competitors including Microsoft (MSFT) and Google. It also will have to replace its chief product officer, as CPO April Underwood recently announced she would step down to focus on her investment firm.

Is a direct listing the best route? Spotify (SPOT) at least provides a test case. It sold more than 177 million shares to the public and opened at $165.90, well above the $132 reference price set by the New York Stock Exchange. But its stock has since come back to earth, trading around that $132 mark.

The Chinese zodiac tells us that 2019 is the year of the pig, but investors in initial public offerings may begin calling it the year of the unicorn. The mythical beast is also the nickname for privately held start-up companies valued at $1 billion or more, and a herd of them may be galloping to the public market this year. Analysts at Renaissance Capital, a provider of IPO-themed exchange-traded funds and research, say that companies on track for 2019 IPOs include ride-sharing companies Uber and Lyft, photo-sharing app Pinterest, popular workplace messaging app Slack and stationary bike seller Peloton. Renaissance says offerings are also possible from home-rental platform Airbnb, Elon Musk–led aerospace firm SpaceX and Greek-yogurt maker Chobani.

A huge year for IPOs in 2019 would represent a continuation of 2018’s torrid tempo. Through the first three quarters, 156 companies had gone public—50 more than the same period in 2017—and the $39.8 billion those companies raised was 62% more than the take the year before. At that pace, 2018 will likely have been the biggest IPO year since 2014 and just the third year in the past decade to surpass 200 IPOs, says Renaissance.

Market slides can disproportionately affect recent IPOs, and if they perform poorly, the pace of new issues could slow. “These stocks tend to be more volatile than more-established names,” says Renaissance principal Kathleen Smith. “When there’s a big market drop, investors tend to sell off or avoid recent IPOs to move to safer corners of the market.”

But even persistent market choppiness in the year ahead probably wouldn’t deter the likes of Uber and Lyft from going public, says Josef Schuster, founder of IPOX Schuster, an investment research firm and fund provider that specializes in IPOs. A full-fledged bear market, however, would likely force companies to lower their prospective offering prices significantly, which could sideline even the largest companies. “Many of these firms with multi-billion-dollar valuations are already well funded. They can afford to wait things out so existing investors don’t have to take a haircut on their shares,” he says.

How to play. From 1980 through 2017, IPO stocks rose an average of 18% from their offering price on the first day of trading, according to data from Jay Ritter, a finance professor and IPO expert at the University of Florida. But individual investors rarely receive offering-priced shares, which are typically reserved for institutional investors, prized clients of the issuing brokerage firms, and the company’s “friends and family,” which include employees and their relatives. Clients at major online brokerages, such as Fidelity and TD Ameritrade, can apply to receive early IPO shares if they meet certain requirements, but there are no guarantees.

That leaves most investors in the position of having to invest in IPOs after they hit the open market—a risky proposition, says Schuster. Due to their potential to shoot up or plummet in a single day, “any investment in an IPO should have a very conservative weight in your portfolio,” he says.

Once shares hit the open market, there are few predictable patterns in IPOs’ behavior. Analysts tend to initiate ratings on a stock 25 days after an IPO, at which time positive sentiment might boost a stock’s price, Ritter says. After 180 days, a stock’s “lock-up period” expires, allowing pre-IPO investors to sell their shares. That can trigger a sell-off. Schuster says share prices tend to settle down after firms issue their first earnings reports, but the stocks still carry more volatility than more-established securities.

To help mitigate some of the risk of investing in IPOs, read the literature that companies must file with the Securities and Exchange Commission in advance of the offering. One measure to consider, says Schuster, is float, or the percentage of a firm’s stock made available to the public. Companies that drum up demand for a very small number of shares can build momentum and shoot up quickly, but the result is an extremely volatile stock. Any IPO that makes less than 15% of its shares available should give investors pause, he says.

Once a stock begins trading, pay attention to its first-day return. Companies that post negative returns on the first day are likely to carry negative momentum in the market, while companies that immediately skyrocket may have trouble living up to the hype. Schuster looks for first-day returns that fall between 0% and 65%.

Would-be IPOs must disclose information about their revenues, and those with a proven track record tend to do best. From 1980 through 2016, firms with less than $100 million in annual sales posted an average three-year return (after the close of the first trading day) of 11.9%; those with more than $100 million returned 38.4%, according to Ritter. “Companies that have demonstrated that they have a product or service that people are willing to pay for have, on average, been fairly valued by the market,” he says.

What to consider in 2019. Among com­panies rumored to be going public in 2019, there are a few that investors should keep an eye on. Smith cites Slack, eyeglass seller Warby Parker and online sportswear retailer Fanatics as potential IPO successes. “These companies all appear to be growing sustainably, which means there is less risk associated with them,” she says.

Ritter is bullish on the ride-sharing giants even at their rumored lofty valuations—proposals from investment banks purportedly value Uber at $120 billion; Lyft’s most recent valuation is a more modest $15 billion. “Companies like Uber and Lyft operate in winner-take-all markets where one or two companies can dominate a business and be very profitable,” he says. In that context, the high valuations accorded by investors make sense, he says. Ritter believes the stocks’ high price tags could be justified in future years by the introduction of autonomous vehicles, which will significantly cut the firms’ labor costs.

Palantir Technologies, a software company specializing in data analytics, is a tech giant to watch. The firm, founded in 2004, is seasoned as far as IPOs go, says Schuster, and enjoys a predictable revenue stream from a growing, diverse client base, ranging from private firms to federal, state and local governments. What’s more, demand for data analytics is growing and stable, and the firm should be less affected by swings in the economy than other tech firms, he says. Investors should consider the shares if they’re priced reasonably relative to sales, Schuster says. “Anything between 10 and 15 times sales could be attractive.”

Schuster is also enthusiastic about Beyond Meat, a vegan food company that makes meat substitutes, such as its popular line of burgers, that appeal to omnivores who want vegan offerings that closely mimic the taste and texture of meat. Schuster thinks the company could become a market leader among firms that encourage healthier eating.

Initial public offerings (IPOs) are the process companies use to tap the public stock markets for capital. These offerings usually involve early-stage businesses that are looking for fresh fuel for growth; many are small opportunities, but the biggest IPOs can create mammoth returns for investors.

Consider if you invested $10,000 in the IPO of Amazon.com (AMZN) back in 1997. The e-commerce company's per-share offering price was $18. There have been multiple stock splits through the years, so if you held onto your original investment, you would now own 133,200 AMZN shares. What's more, the value of your investment would be roughly $32.5 million. That's more than enough for most folks to retire on.

But IPOs aren't guaranteed tickets to riches, as notable dot-com implosions Pets.com and Webvan proved. Indeed, whenever there is a chance to snag high returns — even with the hottest upcoming IPOs — there are always lots of risks lurking.

Public offerings aren't only relegated to startup companies. Some of the biggest IPOs come from multibillion dollar organizations that have been around for decades. These will often lead to huge deals.

But what are the biggest IPOs in U.S. history? Here, we take a look at the largest 25 public offerings ever to grace U.S. markets. (Data is courtesy of Renaissance Capital, unless otherwise noted.)

• IPO date: October 22, 1998
• Amount raised in IPO: $4.4 billion
• Offer price: $23.00

In 1875, Isaac Elder Blake founded Continental Oil and Transportation Company, which was focused on oil, kerosene and other chemical products. He sold Continental to Standard Oil in 1884, but it was spun off in 1911 as part of a monopoly breakup.

Through the years, the company bulked up via acquisitions and eventually changed its name to Conoco. DuPont acquired the company during the go-go 1980s takeover era, taking advantage of a depressed share price due to plunging oil prices. But the companies weren't a good fit, and Conoco was once again spun off via an IPO.

The 1998 offering raised $4.4 billion — a record at the time that still keeps Conoco on this list of the biggest U.S. IPOs ever. When Conoco went public, it was the sixth-largest oil company in the U.S., boasting a network of 7,900 gas stations.

Conoco eventually merged with Phillips Petroleum in 2002 to form ConocoPhilips (COP). The company today has operations in 14 countries and has about 10,000 employees. Its total assets as of December 2025 were $122 billion.

• IPO date: June 29, 2021
• Amount raised in IPO: $4.4 billion
• Offer price: $14.00

The IPO roadshow for Didi Global, the top ride-hailing app company in China, took only three days.

The CEO boasted about the company's growth potential, underscoring the fact that a sizable amount of the populations in the Chinese cities DiDi covered did not have cars. The company was also making substantial investments in artificial intelligence (AI) and electric vehicles (EVs).

Unfortunately, the investment would turn into a disaster — and quickly. Within 11 months of its debut as one of the biggest U.S. IPOs ever, Didi delisted its shares from the NYSE due to the Chinese government's crackdown on the company. Regulators had concerns about Didi's data security, ordering it to stop taking new customers and terminating some of its apps. The result was a nearly 13% decline in the company's top line.

By the time of the delisting, the company's market capitalization had plunged to around $11 billion from above $75 billion in July 2021.

• IPO date: July 24, 2024
• Amount raised in IPO: $4.4 billion
• Offer price: $78.00

Lineage (LINE), which calls itself the world's largest global temperature-controlled warehouse REIT, debuted with the largest IPO since Arm Holdings (ARM) in 2023 when it listed on the Nasdaq on July 24, 2024.

LINE's final initial offering price of $78 was at the high end of the company’s target range of $70 to $82, and management also boosted the number of shares on offer from 47 million to 56.9 million.

Shares opened at $82 on July 25 and traded as high as $89.85 on July 31, putting a market cap north of $20 billion on the stock.

Just the second REIT to go public since 2022, according to Renaissance Capital Management, LINE has had a tough go of it since. Demand for cold-storage services surged during the pandemic and figured prominently in Lineage's IPO decision but has since cooled.

Uncertainty around tariffs and geopolitical developments also create headwinds for Lineage.

LINE has lost nearly 50% since its IPO and now carries a market cap of $9 billion.

• IPO date: March 11, 2021
• Amount raised in IPO: $4.6 billion
• Offer price: $35.00

When Bom Kim dropped out of the Harvard MBA program in 2010, he started Coupang (CPNG). He saw a huge opportunity to build an e-commerce platform in South Korea, Asia's fourth-largest economy by gross domestic product (GDP).

The focus was to create a marketplace such as China's Alibaba Holdings (BABA) that would allow for an extensive product selection. But Kim also built a distribution network with warehouses and logistics systems, similar to Amazon.com.

The strategy worked. From 2018 to 2021, revenue soared to $12 billion from $900 billion. A major catalyst for the company's top line was the COVID-19 pandemic as consumers in lockdown had little choice but to use Coupang's service.

Unfortunately, in a story similar to many pandemic darlings, growth cooled as the world returned to normal, and CPNG shares came under pressure. By May 2026, the stock had lost nearly two-thirds of its initial value.

• IPO date: July 2, 2002
• Amount raised in IPO: $4.6 billion
• Offer price: $23.00

Conglomerate Tyco bought top business lender CIT in 2001, then tried unsuccessfully to sell it back off in early 2002. Management then switched gears to spin it off with an IPO instead.

Wall Street wasn't very enthusiastic about the CIT Group deal, in part because Tyco CEO Dennis Kozlowski had abruptly resigned a month earlier due to reports he was being investigated about dodging taxes.

The IPO priced below its original range, and the financial stock fell by 4% on its first day of trading. Still, the offering raised a hefty $4.6 billion — still one of the biggest U.S. IPOs ever — most of which was used to pay down Tyco's massive debt load, which it accumulated because of an aggressive merger and acquisition (M&A) spree.

The company eventually had to file for bankruptcy in late 2009 amid the financial crisis, and shareholders were wiped out. But CIT Group remained, albeit with a massive restructuring.

In January 2022, CIT Group merged with First Citizens BancShares in an all-stock deal worth roughly $2.2 billion.

• IPO date: September 13, 2023
• Amount raised in IPO: $4.6 billion
• Offer price: $51.00

The origins of Arm Holdings (ARM) go back to 1990. The company was a joint venture of Apple (AAPL), VLSI Technology and Acorn Computer, and its focus was to build cutting-edge semiconductors for computers with batteries. With the growth in mobile devices, Arm's strategy was spot on.

In 1998, the company would go public on the London Stock Exchange. Then, in 2016, Japanese conglomerate SoftBank agreed to shell out $32 billion for Arm. A few years later, Nvidia (NVDA) attempted to acquire the company for $40 billion, but regulators blocked the deal.

Arm's valuation would continue to rise. By the summer of 2023, SoftBank took the semiconductor stock public at a market capitalization of roughly $55 billion — making the Arm IPO one of the biggest on record.

Currently, the company's chips are inside nearly all smartphones. However, amid a maturing market, Arm is looking to expand into other categories such as data centers and AI. In its most recently completed fiscal year, the company reported revenue of $4.9 billion.

• IPO date: June 21, 2000
• Amount raised in IPO: $4.9 billion
• Offer price: $19.99

By summer 2000, American markets were under intense pressure from the dot-com bubble burst, but that didn't deter Chinese telecom company China Unicom. The firm pulled off a $4.9 billion deal — at the time, the biggest U.S. IPO ever by a Chinese company — to list on the New York Stock Exchange, and managed to gain 12% on its first day. Shares also were offered in Hong Kong.

China Unicom, the second largest telecom company in China at the time, was a division of state-run China United Telecommunications. CHU held about 14% market share, including strong footprints in Beijing, Shanghai and Tianjin. Half its revenue came from paging.

Currently, the company has more than 1.1 billion subscribers and has found growth in such categories as cybersecurity, the internet of things (IoT) and big data.

China Unicom delisted from the NYSE in 2021.

• IPO date: March 13, 2000
• Amount raised in IPO: $5.2 billion
• Offer price: $33.92

In 2000, German chipmaker Infineon Technologies (IFNNY) wanted to get a piece of the dot-com action in the U.S. — and it worked. The deal was the second-biggest for a German company — second only to Deutsche Telekom (DTEGY) — and shares more than doubled, to $70 per share from a $33.92 offering price.

Infineon was a division of old-line industrial operator Siemens (SIEGY) and was ranked No. 10 in the world among chipmakers, in terms of total sales. Siemens, by the way, had enjoyed deal-making success a year earlier with an IPO of its Epcos division.

Infineon Technologies delisted from the New York Stock Exchange in 2007, but still trades on the Frankfurt Exchange, as well as over-the-counter in the U.S.

It has a strong footprint in key markets such as self-driving vehicles and IoT. Its power and smart card ICs are No. 1 in market share. In fiscal 2024, revenue came to nearly 15 billion euros and there were 57,000 employees worldwide.

• IPO date: November 10, 1999
• Amount raised in IPO: $5.5 billion
• Offer price: $50.00

In 1907, James Casey created the American Messenger Company, which offered parcel and special-mail service primarily by foot and bicycle. However, it upgraded its "fleet" with its first Ford Model T in 1913, and six years later, it took on the name we know it by now: United Parcel Service (UPS).

UPS built a massive business without much need for outside capital. UPS didn't go public until 1999 — compare that with rival FedEx (FDX), which was founded in 1971 and went public in 1978.

Demand for the UPS IPO was so robust that the deal had to be delayed by 45 minutes. Shares ended their first day of trading up 36%. Unlike many offerings, employees collected a nice windfall; they collectively owned about a third of the company's shares.

Since its massive IPO, UPS has continued to thrive. In fiscal year 2025, the company posted $88.7 billion in revenue and delivered 20.8 million packages per day across more than 200 countries and territories.

• IPO date: May 12, 2026
• Amount raised in IPO: $5.55 billion
• Offer price: $185.00

The post-pandemic IPO market has been shaky due to several temporary hurdles. In 2026, these have included private-equity concerns, worries about an artificial intelligence (AI) bubble and geopolitical uncertainty.

But things appear to be looking up, thanks, in part, to a blowout offering in mid-May from Cerebras (CBRS), a company that builds high-powered chips for complex AI applications.

Cerebras bills itself as "the fastest AI infrastructure" firm. "For many workloads, Cerebras is up to 15 times faster than leading GPU-based solutions as benchmarked on leading open-source models," the company explains in its S-1 filing. "In some more exotic workloads, we have been more than 1,000 times faster."

In 2025, Cerebras had $510 million in total revenue, up 76% from 2024, and $237.8 million in net income vs a net loss of $481.6 million from the year prior.

So far in 2026, Cerebras has already inked multiyear deals with artificial intelligence giants OpenAI and Amazon Web Services. Its backers also include OpenAI's Sam Altman, Greg Brockman and Ilya Sutskever.

On May 13, the company priced its offering at $185 per share, above the high end of its upwardly revised range. Based on the 30 million shares of common CBRS stock it offered, the AI company raised $5.55 billion in its offering, making it not only one of the biggest IPOs of the year but one of the largest U.S. IPOs ever.

• IPO date: October 5, 1998
• Amount raised in IPO: $5.6 billion
• Offer price: $25.00

In 1851, Switzerland's government created a telegraph network to run through the country. This would later become the system for telephones across Switzerland. The organization would later come to be known as Swisscom (SCMWY), and it continues to adapt quickly to emerging technologies such as the mobile networks.

In the 1990s, the Swiss government felt that the best strategy for growth and innovation was to privatize Swisscom. To do this, it held a public offering that raised $5.6 billion in the U.S. and a total of $7.1 billion on a global basis — securing its place on this list of the biggest IPOs ever.

The party didn't last, though, and in 2007, Swisscom delisted its shares from the NYSE. The main reason was that the costs and regulations were too onerous, given the low trading volume. The stock is still traded over the counter.

Today, Swisscom has half of market share in mobile communications in Switzerland and 46% of the broadband category.

• IPO date: November 17, 1997
• Amount raised in IPO: $5.6 billion
• Offer price: $25.00

Similar to Swisscom's history, Telstra (TLGPY) originated from Australia's telecom system, which came under the Postmaster-General Department's watch in 1901. In 1993, the system was renamed to Telstra, whose name is a mashup of "telecommunications" and "Australia."

As competition became more intense, Australia's government set up a program for privatization of Telstra in 1997. The first step was a partial IPO of Telstra. The offering resulted in a $5.6 billion haul from investors.

As of now, Telstra remains Australia's top telecom operator. The company has 22.5 million retail mobile customers.

Telstra delisted from the NYSE in 2006, but still trades over the counter in the U.S.

• IPO date: December 16, 2025
• Amount raised in IPO: $6.26 billion
• Offer price: $29.00

Medline (MDLN) debuted in December 2025 in what was the biggest IPO since Lineage's offering in July 2024. The medical supplies company previously traded on the public markets in the mid-1970s, but was taken private by Jim and Jon Mills, who founded the company in 1966.

In 2021, a group of private equity firms — Blackstone, Carlyle and Hellman & Friedman — acquired a majority stake in Medline for roughly $30 billion, in what was then the largest leveraged buyout since 2008.

Medline currently operates 22 manufacturing facilities and 69 distribution centers across more than 100 countries. It employs 43,000 folks worldwide.

Its growth is impressive too. The company has enjoyed more than 50 straight years of annual net sales growth. In 2025, Medline generated net sales of $28.4 billion, up 11.5% from the year prior. In the first three months, net sales rose 9.8% to $13.5 billion.

Its share price, meanwhile, has been choppy since its IPO. The healthcare stock is down more than 7% so far in 2026 (through May 14) to trade near $39, just below its December 17 close of $41.

• IPO date: October 17, 1997
• Amount raised in IPO: $7.3 billion
• Offer price: $32.00

In 1878, the French government created the Ministry of Posts and Telegraphs. This would be the country's exclusive telecommunications organization that would eventually become France Telecom.

By the mid-1990s, the French government began the privatization of various state-owned businesses. One of its most prized assets was France Telecom. The timing of the public offering was also favorable, as it came during the dot-com bubble. Investors were optimistic that the platform could be leveraged as valuable internet infrastructure.

In 2007, France Telecom changed its name to Orange (ORANY). It was a recognition that the company had expanded its platform into different business segments. Orange was also a more memorable brand for consumers.

Currently, Orange has more than 340 million customers.

• IPO date: May 10, 2019
• Amount raised in IPO: $8.1 billion
• Offer price: $45.00

Garrett Camp and Travis Kalanick founded Uber Technologies (UBER) in 2009. They would create one of the killer apps for the smartphone era.

The founders were aggressive in their growth strategies. They raised huge amounts of capital and quickly built an extensive network.

But some of the moves were controversial. For one, Uber built software to circumvent the efforts of regulators. Then there were various sexual harassment and discrimination claims. There were also problems with the company's self-driving car efforts, namely in 2018, when a pedestrian was struck and killed. In 2017, Kalanick resigned as CEO.

When Uber went public, the company raised a hefty $8.1 billion — making it one of the biggest IPOs ever. The deal turned out to be a dud, though, with shares falling nearly 8% on their first day of trading. Within a year, they would lose more than half their value.

However, the stock has put in a solid performance on the price charts in recent years and is now up more than 60% from its offer price.

• IPO date: June 13, 2001
• Amount raised in IPO: $8.7 billion
• Offer price: $31.00

Philip Morris International (PM), which had purchased Nabisco in 2000, spun off Kraft Foods in 2001, using much of the offering's proceeds to pay down debt from the acquisition.

Kraft Foods at the time had a nice portfolio of brands, including Kraft Macaroni & Cheese, Maxwell House, Philadelphia Cream Cheese, Oreo and Oscar Mayer. It also had an interesting leadership structure that included co-CEOs, and Philip Morris' CEO was the chairman.

Nonetheless, even one of the biggest IPOs in U.S. history spurred little investor interest, with shares rising just 1% on their first day of trading.

In 2012, Kraft announced it would split off its North American grocery business as Kraft Foods Group, with the remaining snack-foods company to be renamed Mondelez International (MDLZ). Three years later, Kraft Foods Group merged with Heinz to become Kraft Heinz (KHC) in a deal facilitated by Warren Buffett's Berkshire Hathaway (BRK.B) and global investment firm 3G Capital.

• IPO date: April 27, 2000
• Amount raised in IPO: $10.6 billion
• Offer price: $29.50

The AT&T Wireless IPO came at the peak of the dot-com boom, as parent company AT&T wanted to capitalize on the frenzy. The deal was done by issuing "tracking stock." This tracking stock essentially trades based on the performance of a company's division but doesn't require the company to yield control of the unit or spin off the division's actual operations.

AT&T Wireless was growing at a fast pace, as were other mobile companies including Sprint and Nextel. Revenue spiked by 41% year-over-year to $7.6 billion in 1999, and the firm boasted 12 million subscribers. No one was surprised when AT&T raised a then-record $10.6 billion in one of the biggest U.S. IPOs ever, a year after UPS' $5.5 billion raise.

AT&T Wireless eventually sold out to Cingular Wireless — itself a joint venture between SBC Communications and BellSouth, which were broken off from the original AT&T — in 2004 for $41 billion. SBC eventually took on the AT&T brand as AT&T Inc. (T).

• IPO date: November 10, 2021
• Amount raised in IPO: $11.9 billion
• Offer price: $78.00

From an early age, RJ Scaringe would restore cars in his neighbor's garage. But over time, he saw that there needed to be alternatives to fossil-fuel vehicles.

This led him to focus on getting an education in advanced mechanical engineering. He would eventually receive a doctorate from the Massachusetts Institute of Technology's (MIT) Sloan Automotive Lab. After this, he started his own company to build cars in 2009. It would become Rivian Automotive (RIVN) and the vision was to create electric-powered trucks and SUVs.

Pulling this off required more than innovation. Scaringe had to raise billions of dollars to build the infrastructure. Some of his backers were Amazon and Ford Motor (F).

When Scaringe took the company public in late 2021, he was able to raise a hefty $11.9 billion. This was even As the company generated minimal revenue and had lost about $2 billion since 2020.

The IPO got a strong reception from Wall Street. On Rivian's first day of trading, shares shot up by nearly 30%, and the market value of the company was above $100 billion.

But Rivian was not able to keep up the momentum. The stock is now down more than 80% from its IPO price.

• IPO date: November 17, 1997
• Amount raised in IPO: $13 billion
• Offer price: $17.00

The West German government created Deutsche Telekom (DTEGY) a few years after World War II. The organization has undergone several restructurings since, and the privatization process began in early 1995.

In late 1997, the government launched a massive IPO for Deutsche Telekom, raising roughly $13 billion in fresh capital.

The deal was challenging, though. For the most part, the growth started to slow, and competitive pressures took a toll. A key advantage for Deutsche Telekom, though, was that it had a monopoly in Germany for internet services.

Today, the company is one of the world's largest telecom operators, with 245 million mobile customers and 21 million broadband lines. It has operations in more than 50 countries.

While the communication services stock delisted from the NYSE in 2010, it's still traded over the counter.

• IPO date: November 18, 2010
• Amount raised in IPO: $15.8 billion
• Offer price: $33.00

General Motors (GM) has a rich history dating to 1908, spanning iconic brands (current and defunct) such as Chevrolet, Cadillac, GMC, Pontiac, Hummer, Saturn and Opel.

However, it wasn't immune to the financial crisis, and it in fact succumbed in June 2009, when it filed for bankruptcy. This included a $50 billion bailout from the federal government that sparked the nickname "Government Motors."

But GM was able to get its house in order. The company worked aggressively to cut costs, streamline operations, revamp the lineup and invest more in the Chinese market.

The result? General Motors was able to launch a successful IPO a couple of years later. It reduced its obligations to the U.S. government by $22 billion (and fully paid off the government by 2015), and it made a $4.7 billion profit in 2011 — its first positive annual earnings since 2004.

The stock, on a price basis, has done well for investors, returning nearly 140% from its IPO price.

• IPO date: May 18, 2012
• Amount raised in IPO: $16.0 billion
• Offer price: $38.00

There was plenty of drama in the lead-up to the Facebook IPO. Facebook's prospectus noted that user-base growth likely would slow. The mobile side of the business was lagging. CEO Mark Zuckerberg didn't win any friends when he wore a hoodie to his investor presentation, leading many to believe he had a lackadaisical attitude toward the process.

The day of the IPO was no better. Facebook's deal pricing was delayed because of a Nasdaq glitch that resulted in roughly $500 million in losses across numerous Facebook investors.

The situation got worse in the next few months, as Facebook plunged below $20 per share.

But Zuckerberg didn't flinch. He swiftly focused on investing in mobile, including upgrading the original Facebook app and also making deals for image-based social media company Instagram and messaging service WhatsApp. Facebook more than recovered. By August 2021, the shares fetched more than $380.

Later that year, Zuckerberg took a big bet on the metaverse and changed the name of the company to Meta Platforms (META). However, the results were mostly disappointing and expensive. Zuckerberg has since cut back on costs and invested heavily in AI, and the Magnificent 7 stock staged a nice comeback.

• IPO date: November 2, 1999
• Amount raised in IPO: $16.5 billion
• Offer price: $45.23

Italian utility company Enel SpA (ENLAY) had a few things weigh on its IPO — namely, it was a utility (which doesn't tend to create excitement), and it was a foreign operation, which also tends to hurt interest.

Wall Street's reception was an unsurprising yawn. Enel became the largest publicly traded utility in the world, but the utility stock barely budged on the first day of trading, crawling ahead by just 0.33%.

Another interesting wrinkle: Enel was state-owned. The Italian government actually used the deal to bolster its treasury, as part of a wide-scale policy of privatization and attempting to adopt the euro.

But while the Enel IPO was the second-largest deal raise in U.S. market history, the stock never got much traction. By 2007, management chose to delist from the NYSE because of low trading volumes.

• IPO date: March 18, 2008
• Amount raised in IPO: $17.9 billion
• Offer price: $44.00

On March 16, 2008, JPMorgan Chase (JPM) agreed to buy Bear Stearns for a mere $2 per share — a 93% discount to the prior close (and a price that eventually would be moved up to $10 per share) — in a deal that involved a $30 billion loan from the Federal Reserve. It sent shockwaves across Wall Street, as investors started to worry about America's largest financial institutions.

This was the environment Visa (V) had to contend with when, a couple of days later, it pulled off one of the biggest IPOs in U.S. history.

This was a gutsy move by management, who wanted to make a statement that Visa was in solid financial condition. Visa operated the world's largest payments system and was owned by about 13,000 financial institutions. At the time, it had about 1.5 billion cards in use, compared with 916 million for rival Mastercard (MA). Wall Street cheered the offering, driving V shares up 28% on their opening day.

Anyone willing to invest in Visa during this time is doing cartwheels. A $1,000 investment on V's first day of trading would be worth nearly $23,000 today.

• IPO date: September 19, 2014
• Amount raised in IPO: $21.8 billion
• Offer price: $68.00

Chinese e-commerce giant Alibaba Group Holding (BABA) launched in April 1999 by its 18 founders, including its charismatic leader Jack Ma.

Ma, a former English teacher, had little business or technology experience, but he did have a compelling vision: to create a massive marketplace where Chinese businesses could sell their wares in China as well as global markets.

Alibaba's early days were challenging. Funding was difficult to come by, as tech companies were folding left and right in the dot-com bubble bust . Still, the company found traction and eventually built a powerful ecosystem. By the time it launched its 2014 IPO, the company was earning roughly $3.8 billion in annual net income from 279 million active buyers.

BABA's business has since spread to other areas such as cloud computing, digital media and even self-driving vehicles. However, the company has had to deal with challenges, including intense regulatory scrutiny. The result is that the shares have been under pressure during the past few years. In fact, since the IPO, the average annual return for investors has been only about 4%.

When Elon Musk took Tesla (TSLA) to market in June 2010, the electric vehicle maker raised more than $226 million in its IPO. However, that pales in comparison with General Motors, which raised roughly $20 billion in its November 2010 offering, when the automaker returned to the public markets after filing for Chapter 11 bankruptcy in 2009.

Sixteen years later, Musk had his redemption on the IPO stage, with the entrepreneur taking SpaceX (SPCX), his space exploration and satellite company, public in what is the biggest IPO ever.

Elon Musk founded SpaceX in 2002, intending to lower costs for space launches and eventually build a livable colony on Mars. The company had its first successful space launch in 2008 and has since had more than 650 total launches. It also wants to build data centers in space.

"A key to its success has been a relentless focus on innovation," explains Kiplinger contributor Tom Taulli. "The company's breakthroughs include reusable orbital rockets, which have greatly reduced the costs of space flights; vertical rocket landings; and onboard autonomous systems."

SpaceX also owns Starlink, a satellite internet project that today provides coverage to roughly 10 million customers across 160 countries and territories, and xAI, Musk's artificial intelligence company that owns X (formerly Twitter).

The SpaceX IPO was priced at $135 per share, and based on the 555.6 million shares it sold, it raised $75 billion in its offering. This easily knocked Alibaba out of the top spot for biggest U.S. IPOs. It also surpassed Saudi Aramco as the biggest global IPO ever.

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