After a turbulent and volatile 2018, there are many companies that plan to conduct initial public offerings (IPOs) in 2019. Some companies already have formally filed their S-1 and equivalent forms with the U.S. Securities and Exchange Commission (SEC). Other companies have filed confidential data with the SEC for IPOs, and other so-called unicorn companies, those with private market valuations north of $1 billion, are all highly speculated to come public.
Stock market investors actually want to see more IPOs. There has been widespread criticism that many companies are waiting too long to come public. Some investors have bought into these companies on secondary private company exchanges as insiders, and prior backers have sold shares here and there. Unfortunately for unicorns and regular companies, the 2018 IPO market was less than stellar for investors. Barron’s even reported at the end of December 2018 that 65 of the past 100 such offerings were “busted IPOs” as their market prices were actually under their formal IPO price — and some of those are considered to be great companies.
Even the best of companies can suffer handily during bad markets. That usually depresses valuations for IPOs, even if the market has been chomping at the bit for a company to finally have an IPO.
24/7 Wall St. has compiled a list of companies likely be on the IPO docket for 2019. Note that some of these companies have been on that IPO docket, or at least were believed to be, for more than a year. Companies such as Uber and Lyft, Airbnb, Pelaton, Pinterest, Slack and WeWork are all on the list here. There are also other companies, some of which are widely anticipated to come public, that may be unheard of or not very well known to the investing community. And for the record, this is a preliminary list and some data may change in a moment’s notice that would take any of them off the IPO docket.
Here are more than 15 highly anticipated IPOs to watch for in 2019.
Lyft Versus Uber
Both Lyft and rival Uber Technologies reportedly filed confidential IPO paperwork with the SEC in 2018. These are two of the most heavily watched companies of the entire IPO class of 2019, and they could set the stage for a massive pop to the dollar values of unicorns and IPOs for 2019. Of course, this assumes that either or both still choose to continue the process of coming public. And also there are risks here that both companies are not profitable and may have waited too long to come public.
Lyft actually may beat its larger rival Uber to market, but there have been concerns that the recent stock market volatility could get in the way. In fact, coming public if the market were to continue drifting lower in 2019 might end up creating the equivalent of a dreaded “down-round,” wherein venture-backed companies raise new capital at a lower valuation than in prior funding rounds.
The market may want profits if the recent volatility continues. Neither Lyft nor Uber can claim to be anywhere close to profitable. Lyft reportedly hired JPMorgan as its IPO manager, with an anticipated value of $15 billion. The Wall Street Journal reported that Lyft is hemorrhaging money, to the tune of a $1 billion loss based on last quarter’s revenue and loss rate. Uber has posted a private valuation of more than $60 billion, but after losing just over a billion in the third quarter, its annual loss run rate would be $4 billion.
Airbnb has competed against the hotel industry and other home rental services for years now, and some investors have been calling for it to have an IPO, long before 2019. Even during the summer of 2018, it was widely reported that Airbnb would be public around June of 2019. Still, inside turnover has created some uncertainty for a company that was reportedly valued at $31 billion after a $1 billion capital raise in 2017. Airbnb also was said to have hit the $1 billion per quarter in revenues for the third quarter, and the company previously was reported as having hit profitability in prior reports. It also has expanded with experiences, boutique hotels, and it has its “most wishlisted homes” that can be rented around the world.