India’s SoftBank-backed hotel chain Oyo Hotels filed a public offering on Friday, just two days after fashionable bespectacled unicorn Warby Parker (WRBY) went public on the New York Stock Exchange.
The flurry of activity has become commonplace in a record wave of IPOs this year that has seen buzzing bids from Robinhood (HOOD), Coinbase (COIN) and 23andMe (ME).
In a new interview, Suzanne Shank – president and CEO of investment bank Siebert Williams Shank – said the IPO boom comes down to two main factors: companies repositioning themselves during the pandemic and the persistence low interest rates from the Federal Reserve.
“I think we’re seeing businesses that have both benefited from the pandemic, as well as those sort of restarting after the pandemic,” she says. “It really sparked this increased deal flow.”
During the third quarter, which ended Thursday, 94 companies went public in the United States and raised a total of $27 billion. It was the busiest July-September period since 2000, according to a report by Renaissance Capital.
Across the world, more than 2,000 IPOs have raised $421 billion so far this year, a record high, Reuters reported.
Additionally, other public offerings are on the way in the fourth quarter, including high-profile IPOs of delivery company Instacart and electric pickup truck maker Rivian, Yahoo Finance’s Jared Blikre reported Thursday.
The Federal Reserve’s prolonged near-zero interest rate policy has boosted corporate valuations and offered reassurance of a supportive capital environment, Shank said.
“Earlier in the year, inflation concerns had investors worried that the Federal Reserve might change policy, but after the Fed said inflation would not change over the long term,” it added. she. “It really was a robust IPO period.”
“Low interest rates have pushed up the valuations of growing companies, and the hundreds of unicorns in the pipeline are looking to take advantage of that,” she says.
Uncertainty remains about how long the Fed’s interest rates will stay low. At a meeting last month, the Fed flagged the potential for six or seven rate hikes through 2024 as it plans to scale back its asset purchase program by the end of the year. year.
Shank started her career as a civil engineer, before realizing she could have more impact by funding projects than by designing them.
After earning a master’s degree in business administration from the Wharton School of the University of Pennsylvania, she co-founded the investment bank Siebert Cisneros Shank, which later became Siebert Williams Shank.
Speaking to Yahoo Finance, she noted that IPOs were concentrated in the healthcare and biotech sectors, but praised the strong performance of the economy.
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