Number of IPOs in the U.S. 1999-2019
In 2019, there were 159 initial public offerings (IPOs) in the United States. This was half as many as there were twenty years ago, when the Dot Com Bubble was forming. This is not a coincidence. The number of IPOs is a bellweather for investor confidence.
What does it mean to go public?
The management of a private company has a lot of control over its operation but raising funds from investors is more difficult. To access funds from regular investors, that is the general public, firms go public by offering stock shares at a certain price. As a result, these firms often have more capital to work with. An IPO can raise billions of dollars for a firm. However, publicly traded companies also face increased regulation and disclosure requirements.
Staying private
Some firms delay going public for a longer time, in spite of their increasing value. If their valuation goes above one billion U.S. dollars, these firms are called unicorns. Some firms, such as SpaceX, are still heavily investing in research and development projects, which shareholders often dislike due to low short-run dividends. At the moment, most unicorns are found in the technology sector, which is also the leading sector for IPOs in the United States. This indicates that investors consider this to be the industry most likely to see growth, and thus most worth investing in when companies go public.
What does it mean to go public?
The management of a private company has a lot of control over its operation but raising funds from investors is more difficult. To access funds from regular investors, that is the general public, firms go public by offering stock shares at a certain price. As a result, these firms often have more capital to work with. An IPO can raise billions of dollars for a firm. However, publicly traded companies also face increased regulation and disclosure requirements.
Staying private
Some firms delay going public for a longer time, in spite of their increasing value. If their valuation goes above one billion U.S. dollars, these firms are called unicorns. Some firms, such as SpaceX, are still heavily investing in research and development projects, which shareholders often dislike due to low short-run dividends. At the moment, most unicorns are found in the technology sector, which is also the leading sector for IPOs in the United States. This indicates that investors consider this to be the industry most likely to see growth, and thus most worth investing in when companies go public.
