The IPO market is hot, but how does it compare to the top of the internet bubble in late 1999 and early 2000?
To fill in this gap, I turned to Jay Ritter, a finance professor at the University of Florida and one of academia’s leading experts on the IPO market. One of Ritter’s major contributions to IPO research is a comprehensive database of U.S. IPOs dating back to 1980. There are two other relevant data points, which are not plotted in the accompanying chart. Both also suggest the IPO market is more heated than any year since the top of the internet bubble:
Note that Ritter’s IPO totals do not include SPACs — the Special Purpose Acquisition Companies that have raised money this year. These companies, sometimes known as “blank check companies,” have no business operations. They are created solely to raise money that would enable them to acquire other already-existing companies.
What does this mean for the stock market as a whole? Ritter says that the current IPO climate reminds him of the disconnect that existed at the top of the internet bubble between internet stocks, which sported sky-high and ultimately unsustainable valuations, and the rest of the market. Said Ritter: “We’re seeing the same kind of disconnect today… The valuations of some of these companies going public have gotten so high that they offer very little upside for investors.
this headline was written by establishment cheerleaders in full damage control over the market reacting to woke ideologues in charge of u$d