What percentage of IPOs are profitable?

 An initial public offering, IPO, or stock market launch is the first sale of stock by a private company to the public. IPOs are often issued by smaller companies in search of the capital necessary to expand their operation but are also often performed by larger, privately owned companies looking to become publicly traded on stock exchanges. China has recently emerged as a leading IPO market but the United States remains close behind in terms of IPO volume. The largest IPO in the U.S. so far was that of Alibaba Group Holding in 2014, in which 21.77 billion U.S. dollars was raised.

What drives companies to file for an IPO?

IPOs can have many advantages and bring a great deal of benefits to companies; a stock market launch can provide companies with the means to raise expansion capital, diversify their equity base, provide access to cheaper bank loans, and increase exposure to the public. The best performing IPOs are generally those companies whose stock price trades up on the first day. However, IPO returns also differ by sector. For instance, the average IPO returns for a health care company were significantly higher than those of financial companies in 2020.

Are all companies more profitable post-IPO?

An IPO often has a large impact on the profitability of the company in question. The share of U.S. companies that were profitable after their IPO has been falling since a decade high of 81 percent in 2009. In 2020, this figure had dropped to only 22 percent, which may spell bad news for this form of raising capital. Industry experts believe that the rise in unsuccessful IPOs is a result of inflated market valuations of these companies pre-IPO. WeWork publicly filed its IPO paperwork in August 2019 and saw its market valuation fall from 47 billion U.S. dollars to eight billion U.S. dollars by November 2019.

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STATISTICS ON THE TOPIC

• Overview
• IPOs in the U.S.
• Size of IPOs
• Effect of IPO on companies

LARGEST ALL-TIME IPO WORLDWIDE AS OF JAN 2021

Saudi Aramco

LEADING COUNTRY BY NUMBER OF IPOS

Mainland China

NUMBER OF IPOS IN THE U.S.

407

Overview

• Largest IPOs worldwide 2021
• Leading countries by number of traditional IPOs 2020
• Value of VC-backed IPO exits in the U.S., China, and Europe 2010-2020
• Number of IPOs in the U.S. 1999-2020
• Largest IPOs in the U.S. 2021

IPOs in the U.S.

• Equity raised by companies before IPO in the U.S. 2000-2020
• Company valuation before IPO in the U.S. 2000-2020
• Number of venture-backed IPOs in the U.S. 2004-2020
• Underwriters of largest IPOs in the U.S. 2020
• U.S. IPO underwriter fees 2020, by deal size

Size of IPOs

• Size of IPOs in the U.S. 2000-2020
• Median IPO size in the U.S. 2005-2020
• Distribution of IPOs in the U.S. 2014-2020, by size
• Money raised by IPOs in the U.S. 2019-2020, by sector
• Size of VC-backed IPOs in the U.S. 2000-2020

Effect of IPO on companies

• Share of IPOs closing above IPO price on debut in the U.S 2008-2020
• Share of profitable companies after IPO in the U.S. 2008-2010
• U.S. IPO returns in 2020, by sector
• Best performing IPOs in the U.S. 2021
• Average first-day IPO returns in the U.S. 2008-2020
• Average year-end IPO returns in the U.S. 2008-2020
• Share of U.S. IPOs with negative first day returns 1980-2020