Several unicorns flopped in 2019, will IPOs rebound next year?

Written by
Updated on Mar 11, 2020
Reading time 3 minutes
  • The Dow Jones Industrial Average gained 20% this year.
  • While some companies like Saudi Aramco reaped big during the year, a section of unicorns including Uber, Lyft, and Slack have been struggling ever since they went public.
  • Big IPOs to look out for in 2020 include Airbnb, Postmates, DoorDash, to name a few.

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2019 came with its fair share of ups and downs for new and
previously-listed companies. While the Dow Jones Industrial Average rose 20% beating
one record after another, some newly-listed unicorns are struggling to get by
with some failing even before takeoff.

Popular unicorns such as Lyft, Uber, and Slack have been struggling
since going public during the year, many wondering if they’ll ever attain
profitability.

Peloton and Beyond Meat’s stories haven’t been much different, and
WeWork couldn’t even make it to Wall Street.

The question in the minds of many is: Will 2020 be any
different?

There have been speculations about how massive Airbnb’s
2020 IPO
will be, but no one can for sure bet on the ever-changing public
listing scenery.  

Mr James Gellert, chairman
and CEO of RapidRatings, a research firm that analyses the financial health of
companies, said that: “Airbnb will be next year’s Uber. The attention,
hopes and dreams will all be put on them.” When asked why he thinks
the online hotel renting company is likely to perform better than other
unicorns, he noted that unlike Uber, Airbnb has little to no formidable competition
in its niche.

Stakeholders
are also confident that Postmates, a food delivery company and mattress seller
Casper are in an excellent position to hit the ground running if they make it
to Wall Street.

“2020
could be a good year for the IPO market. There is a tremendous pipeline. IPOs
are not broken, but the bar has changed. Before there was no bar. Investors are
now more demanding and want sustainable business models,” Santosh Rao,
head of research at Manhattan Venture Partners, told CNN in an interview.

According
to Rao, the stocks of Airbnb and Postmates are likely to maintain a bullish
position, if they go public in 2020. DoorDash, a close rival of Postmates is
also on Mr Rao’s radar as he remains confident that it will also be one of the
listings to look out for in the coming year.

However,
the expert believes that the success of these companies will, to a large extent
depend on how much they’ll involve investors in the operational matters of the companies.

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