Due to the COVID-19 pandemic’s impact on the U.S. economy, Summer 2020 had a relatively mellow IPO season. But as the economy begins to return to pre-pandemic highs, numerous companies like Palantir, Airbnb, Snowflake, Ant Group and DoorDash are gearing up to IPO. The Final Round panel breaks down the details.
MYLES UDLAND: A lot of strength in the tech names, the FAANG names, and this comes as the rush for the IPO door continues. Just in the last 36 hours, we've had at least five companies, including Snowflake, Unity, a couple big software names that people have been following, file for their-- file there S-1s. And also Ant Financial announcing-- or Ant Group, as it is now known, announcing its plans to go public in Hong Kong. And Dan Roberts, this is-- I mean, I wouldn't even say the end. This is maybe the beginning or the middle of what seems like an extremely busy fourth quarter coming up here for IPOs, direct listings, and all kinds of new issues.
DAN ROBERTS: Well, it's a new unicorn IPO parade, right? I mean, they're tearing out the gates here. And it feels a little bit like going to Uber, Lyft, Slack, Pinterest, and all those names went public. Of course, we know how many of those IPOs went, at least in the first few weeks and months of trading-- not very well.
Now what's interesting with these names, of course, so many of them still lose money. They're not just not profitable. In many cases, they lose a lot of money. Palantir loses money. Airbnb has been hammered by the pandemic. They're going public anyway. Of course, Palantir doing a direct listing. Airbnb, a traditional IPO. DoorDash, a traditional IPO.
You mentioned Any Group, though, and that really stands apart. Ant Group, of course, in its filing revealing the huge profit it made in the first half of 2020, so doing just fine. And for viewers who may not know Ant Group, it is the company that owns Alipay, which has more than 1.3 billion users. And that's all only by doing business in China. Of course, it allows you to use Alipay, the app, in many places outside of China, but only if you have a Chinese bank account.
So I think it's sort of remarkable for some American Yahoo Finance viewers and readers to see that the most valuable privately-held unicorn in the world is this Chinese payments firm that they may not even know of. But Ant Financial is huge. Of course, it's Jack Ma's imprimatur there. It was spun off from Alibaba. And then Alibaba took a 33% stake after it was spun off.
And this very well could become the new biggest IPO ever, eclipsing Saudi Aramco, which, of course, raised $29 billion in its offering. So what lesson can we really take from this other than that pandemic be damned, certain businesses are doing quite well and swimming along. And many of them are getting that huge just by being in China.
I mean, you talk about Alibaba and Tencent. Long before there was a pandemic, those were two companies we talked about so much, even though they barely do business in the US, although that's changing a little bit with Tencent in gaming. But I would sort of separate the Ant Group offering, which is just going to be gargantuan, from these other traditional US tech unicorn IPOs, each of which will succeed or crash based on its own merit. And, of course, Airbnb, I've also written about-- so interesting to try to rush this out and go public at a time when its bookings were 70% down last quarter.
MYLES UDLAND: Yeah, and I think also a reminder-- and we can go back. I remember when Snap was going public, there's all these questions. Is the window open? And every investment banker says there's no window.
But there's very much a window. There's extremely an IPO window. And it is very wide open right now. And I think just about any business that had any ambitions or any plans-- Brian Chesky said dusted off the documents-- those are going to be fresh as we get into the next couple of quarters.
DAN ROBERTS: Well, and I think they may not say it overtly, but part of this is wanting to hit the public markets before the election, which who knows what kind of impact that might have on stocks. Maybe nothing, but depending on your pundit of choice, some people think that stocks could really take a turn after the election. So get out there. Get it done. Get your liquidity event before the uncertainty.
MYLES UDLAND: Yes, pundit of choice indeed.