The views portrayed in this Goodbye 2020, A Curtain Call on a Challenging Year are subject to change at any time based upon market or other conditions and are current as of January 8th, 2021. While all material is deemed to be reliable, accuracy and completeness cannot be guaranteed.
I’ve heard there’s going to be a recession. I’ve decided not to participate.” – Walt Disney
Without a doubt, the year 2020 will be one to remember. At AFZA Capital, we are very optimistic on the future. However, we feel that it is important to reflect back upon the year and understand the best paths forward.
The great news in 2020 is that we have seen a positive explosion in capital raising. It was one of the biggest surprises this year, especially considering the unknowns we all experienced in March and April. The introduction of unprecedented monetary easing played a critical role helping this flood of new issuance. It was reported that companies raised over $167 billion in initial public offerings this year, blowing past the record of $107.9 billion set in 1999.
Also playing a role was the popularity of SPACs (Special Purpose Acquisition Corporations). A SPAC is a company that is formed to raise capital through an initial public offering (IPO) for the purpose of acquiring an existing company. SPACs accounted for almost half of the fundraising in the IPO market. People find ways to adapt and move forward.
Top IPO’s of 2020
Rocket Companies (RKT) IPO: Aug. 6, 2020.
Snowflake (SNOW) IPO: Sept. 16, 2020.
GoodRx Holdings (GDRX) IPO: Sept. 23, 2020.
Palantir (PLTR) IPO: Sept. 30, 2020.
DoorDash (DASH) IPO: Dec. 9, 2020.
Airbnb (ABNB) IPO: Dec. 10, 2020.
The mega-trend of digital transformation continues to thrust more companies into the public markets. Many companies realize that to remain competitive, they must adopt modern technology such as cloud computing, analytics an artificial intelligence – and that means we are very optimistic on a vibrant technology-sector IPO market in 2021. Additional research shows trading stocks has become free (or much cheaper) for most investors. That has helped spur a large number of young investors looking for high-growth opportunities, like IPO stocks.
As mentioned above, AFZA Capital remains positive and looks forward to a great 2021. Bring on the New Year!