According to the Wall Street Journal and data support from Dealogic, 547 different companies reached the market with IPOs back in 1999 when many by then unknown companies have become household names.
However, the market worth 107.9 billion dollars crashed in a bubble, the same way it started out – surrounded with hype and even bigger hopes that the market will turn out to be sustainable after all.
As the market of IPOs is booming similarly to the Dot Com bubble, many are wondering whether we are looking at yet another bubble through the prism of tech companies joining the market through public offers.
Is IPO Market in 2019 a Bubble?
If we are to judge the IPO market by the failure of Uber IPO or the inability of Lyft to reach the targeted market value, down by 8 billion dollars from expected 22 billion in pre-IPO estimates, then the market of public offers might be in for a rough time.
On the other hand, IPOs such as Zoom (ZM), Pinterest (PINS), Beyond Meat (BYND) and more, are doing more than well, with the success depending on the overall interest from the part of investors.
Additionally, some IPOs of 2018 are losing on their value with the changing market trends, while this case is not stopping the cycle of new IPO debuts, especially among tech companies.
Is the IPO Market of 2019 Overvalued and Saturated with IPOs?
One of the main reasons why some are fearing that IPOs of 2019 might be bubbling very soon much like the Dot Com bubble that brought many companies from their IPO debut to a final bankruptcy, is the fact that the majority of tech companies with IPOs are actually unprofitable.
While investors are relying on growth rates instead, this equation sometimes fails, as it was the case with Uber IPO, which failed miserably by starting the first sale below the initial low-end share price estimate.
Previously, Uber was said to be the biggest IPO that 2019 could see with the last estimate set at 81 billion after estimates between 90 and 100 billion dollars.