Investors are closely watching the situation as they want to learn more about the Covid-19’s impact on the global economy. Interestingly, several of last year’s 159 initial public offerings (IPO), including highly volatile stocks such as Slack, Beyond Meat, and Zoom rose in 2020. Let’s have look at some of them to learn more why it makes sense to invest in 2019 IPO’s.
However, companies mentioned above have been doing well despite the coronavirus pandemic. Moreover, people should take into account that Slack, Zoom, and Beyond Meat strengthened their positions even though the demand for IPO’s is expected to drop dramatically.
According to Factset, only 35 companies went public in the first quarter of 2020. For example, compared with the same period in 2019, the number of companies that went public dropped by 15%. Also, in comparison with the fourth quarter of 2019, the number of such companies fell by 35%.
Millions of people spend more time at home. Many of them are using Zoom as well as Slack. Moreover, demand for Beyond Meat’s plant-based products could increase due to several reasons. The first one is connected with meat safety and the second one with the availability of beef.
Advantages and disadvantages when it comes to investing
Hopefully, many other newcomers are also doing well. For example, Virgin Galactic, Peleton, and Chewy all of them soared in 2020.
Moreover, the Rennaisance IPO ETF which includes many of the top new offerings of 2019, is flat in 2020. However, the S&P 500 fell by 11%.
However, before investing in companies that went public in 2019, people should not forget that not all of last year’s stocks are thriving.
Lyft and Uber both dropped in 2020 as the coronavirus pandemic had a huge impact on both of them. Moreover, due to the ongoing situation, it will be quite difficult for ridesharing companies to turn a profit anytime soon.