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

By: Damian Wood
Damian Wood
As an experienced trader, I work for myself managing my own small portfolio and also contributing on several investment… read more.
on Dec 15, 2019
Updated: Mar 11, 2020
  • 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.

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.

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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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