New year, new 2020 IPOs. As we enter a new year and decade, which private companies can investors expect to go public? While it’s not often strategic to invest in recently launched companies right away, the launch itself can be interesting to watch. Last year provided a slew of IPO meltdowns like Uber, Lyft, and Peloton, which all sank in their first few days of trading. Will the 2020 IPO launches be any better?
Before covering 2020, however, it may be useful to recap last year’s predictions and review how those turned out.
2019 IPO Predictions Recap
IPO Launch?: YES
As predicted, Uber did indeed launch an IPO in May of 2019 at $45 per share. However, it’s been a bumpy ride since then. The stock took a nose dive in late summer and is now sitting at around $30 per share.
Uber continues to battle criticism and scandals, including employee compensation complaints and safety concerns. Assembly Bill 5, a new California law aimed at more fairly compensating contract workers, could be yet another hurdle (especially if other states adopt similar laws, as often happens with California legislation).
IPO Launch?: Sort of (direct listing)
Rather than do an all-in IPO, Slack went the “direct market listing” approach, or “DPO.” This is the same route Spotify took in 2018. A direct market listing is a non-traditional method that helps protect early investors, allowing them to sell their existing stock to new investors directly without introducing more shares. Unfortunately for Slack shareholders, the stock has had a rough early start. So far, it’s fallen about 40% after launch.
IPO Launch?: Not yet
Rumours of an imminent IPO launch have circled Airbnb for years, and they will have to continue in 2020. There’s no IPO launch yet, but they have announced plans to go public in 2020. Investors will have to wait and see if that happens.
IPO Launch?: YES
Fitness equipment company, Peloton, went public in October of 2020 at $23 per share. Four months later, the stock price is now up 8%. However, as predicted back in February of 2019, it has not been a smooth ride. They had a minor PR crisis thanks to an awkward holiday commercial that drew attention for all the wrong reasons. Hopefully they can get back on track in the new year.
IPO Launch?: No, but almost
WeWork had plans to go public in September of 2019, but shelved them right before go-time, citing a wish to “focus on our business, the fundamentals of which remain strong,” according to a statement from their co-CEO’s. They had a rough year, facing increased skepticism from media and investors, and their former CEO Adam Neumann resigning after sexual harassment allegations. As of right now, their IPO is delayed indefinitely.
IPO Launch?: No
Despite speculation, the grocery delivery service, Instacart, never launched an IPO in 2019. They are reportedly still considering it, but for now investors will have to wait and see.
Possible 2020 IPO Launches
Now it’s time to turn to 2020 IPO launches and guess which companies are likely to go from private to public this year. Some of these are speculation, and some are tied to official announcements. However, as the WeWork situation can attest, sometimes the best laid IPO plans can be re-routed.
Could a 2020 IPO for Casper be on the horizon? Casper is a mattress company that specializes in delivering mattresses right to your door via surprisingly small packages. Cutting out the transportation headache of a mattress purchase has made Casper a hit with urban dwellers. They also sell other bedtime accessories like bedding, pillows, and nightlights.
Casper is rumoured to be considering an IPO launch soon. The bed-in-a-box company does have great reviews and a loyal fanbase, but it’s a surprisingly competitive space. There are several other mattress startups to contend with like Nectar Sleep and Purple, as well as established physical-retail names like Mattress Firm.
One of the companies revolutionizing food and grocery delivery is Postmates. Valued at over $2 billion, there have been rumours circling a Postmates IPO for years. However, in October their CEO Bastian Lehmann announced that the company was reconsidering their IPO plans due to the dismal reception of other Silicon Valley startups IPOs like Uber. This could mean the company is reconsidering IPO plans altogether, or simply preparing to ensure a smooth IPO delivery.
If you follow sports at all, you’ve probably seen ads for DraftKings, the online sports betting platform. Established in 2012, DraftKings now boasts millions of users and dominates the online sports betting space (along with its biggest rival, FanDuel). They will likely announce a 2020 IPO launch, but not in the traditional way. They are due to be acquired by Diamond Eagle Acquisition, who will change their name to DraftKings, and go public under a new ticker symbol. Investors will have to wait and see if this plan is a home run.
With over 50 locations across the United States, Topgolf is like a souped up driving range where you can get dinner and drinks delivered to climate-controlled bays. Catering to both golfing elites and amateurs, players can select interesting competitive games that offer a new twist on the traditional driving range format. According to recent reports, Topgolf may be releasing an IPO soon, at a valuation of around $4 billion.