While Uber Technologies Inc. and Lyft Inc. kicked off the IPO blitz of 2019, lesser-known companies such as Beyond Meat Inc. and Zoom Video Communications Inc. have reaped the rewards.
Stellar gains by the meatless burger maker and video conferencing firm helped deliver an exceptionally strong first half for U.S. initial public offerings. The 93 companies that have gone public were up an average 30% as of June 28, according to data compiled by Bloomberg.
Beyond Meat rose more than 500% since debuting in May while Zoom was up 141% since pricing in April.
Uber, which raised $8.1 billion in the year’s largest IPO, fell 1.6%. Lyft, which quickly became a short-seller target after the year’s third-biggest IPO, has seen its shares drop almost 14%.
Uber and Lyft still accounted for a third of the $32 billion raised during the first half of the year — and can rightly claim to have fueled one of the best IPO rallies in years. Year-to-date U.S. IPO proceeds were also the best since 2009 at $40 billion.
“It is a FOMO — fear of missing out — mentality on IPOs because investors are underperforming their benchmarks and looking at IPOs as a way to catch up on performance,“ said Kristin DeClark, the co-head of Barclays Plc’s U.S. equity capital markets practice and global head of technology ECM.
IPO hopefuls faced hurdles early this year such as a partial federal government shutdown that made the U.S. Securities and Exchange Commission unable to review proposed listings. The first big company to break through turned out to be one of the nation’s oldest: jeans-maker Levi Strauss & Co., which raised $623 million in March.
But the biggest standout of the year so far is Beyond Meat. The maker of substitute meat made from chickpeas and beets has given its investors a 550% return on its offer price after it raised $241 million.
Biotech startups contributed disproportionately to the gains with Bridgebio Pharma Inc. and Adaptive Biotechnologies Corp. recording major pops on the same day they went public in June.