The U.S. initial public offering market boomed in 2020. There were a record 407 IPO stocks last year that raised a total of $195 billion. The number of new 2020 listings more than doubled the 195 total IPOs in 2019.
The rise in popularity of special acquisition companies has been a major contributor to the IPO boom. SPACs offer companies looking to go public the option of a public listing via a reverse merger rather than the traditional IPO route. In 2020, there were a total of 230 IPOs that took place via SPAC reverse mergers.
So far in 2021, the boom has continued. The U.S. market had more than 100 IPOs in the first quarter of 2021 that collectively raised $39.2 billion, according to Renaissance Capital.
That boom is on track to continue in April with some of this year’s largest and most highly anticipated new listings just around the corner. Here are five of the biggest IPOs to watch in April.
— Coinbase (ticker: COIN)
— Chardan NexTech Acquisition Corp. (CNAQU)
— Ace Global Business Acquisition (ACBAU)
— Aveanna Healthcare (AVAH)
Coinbase is the largest U.S. cryptocurrency exchange. The company has more than 43 million verified users and $90 billion in assets.
Bitcoin and other cryptocurrencies have been on fire in the past year as more than $6 trillion in government stimulus measures have many investors seriously concerned about the prospect of hyperinflation. The global health crisis created a surge in younger investors who opened accounts on cryptocurrency-friendly apps such as Robinhood and Cash App.
Coinbase filed to go public on Feb. 25 via a direct listing on the Nasdaq. Company insiders and private shareholders will be selling their shares to the public, and the stock will trade under the ticker COIN.
Coinbase’s estimated $90 billion valuation would make the stock one of the largest IPOs in recent history. In 2020, the company reported $1.14 billion in net revenue and $322 million in net income.
Coinbase’s direct listing is reportedly scheduled for April 14.
Robinhood is a commission-free trading app that is popular among younger traders. After generating tremendous growth in 2020, Robinhood has had a controversial start to 2021. CEO Vlad Tenev was even called to testify before Congress after Robinhood restricted trading in GameStop and several other so-called “meme” stocks associated with targeted buying campaigns by Reddit’s WallStreetBets community.
Despite outrage by Robinhood users over the temporary restrictions, the company filed for its IPO on March 23. The majority of Robinhood’s revenue comes from payment for order flow. Robinhood collected $682 million from those payments in 2020, according to Morningstar.
Investors won’t have a clearer picture of Robinhood’s full financial situation until the company’s S-1 filing becomes public. However, the company reportedly has more than 10 million users, and Forbes estimates its valuation at about $40 billion.
There is not yet a definitive date for Robinhood’s IPO. However, given the timing of the March filing, an April or May IPO appears imminent.
Chardan NexTech Acquisition Corp. (CNAQU)
Chardan NexTech Acquisition is a SPAC formed by health care investment bank Chardan. The blank check company filed for a $200 million IPO on March 5 and is expected to begin trading on the Nasdaq under the ticker CNAQU on April 7.
The company is looking for an acquisition target in the health care and fintech spaces to take public via a reverse merger.
Chardan has a track record of successful SPAC acquisitions and listings, including Health Science’s $395 million acquisition of Immunovant ( IMVT) in December 2019. Chardan advised on both the strategy and structure of the Immunovant deal, secured a $150 million investment and participated in two follow-on transactions that raised an additional $321 million following the merger.
The SPAC space has gotten crowded in recent quarters, but Chardan NexTech Acquisition could be the next health care SPAC for investors to keep on their radar.
Ace Global Business Acquisition (ACBAU)
Ace Global Business Acquisition is another new SPAC that is specifically targeting a gaming or e-commerce acquisition in China, Japan or Southeast Asia. The SPAC plans to raise $40 million in its IPO, which is scheduled for April 6. Ace Global will trade on the Nasdaq.
Ace Global CEO Eugene Wong currently serves as managing director of Whiz Partners Asia and is the chief investment officer of the China Hero PJ Fund.
There are currently more than 300 SPACs searching for acquisition targets. As the U.S. SPAC market becomes more saturated, companies are turning to Asia as a potential ripe landscape for deals, according to BDA Partners.
Ace Global is based in Hong Kong, and the ongoing trade war between the U.S. and China could create some additional risk for IPO investors. However, there’s no question China’s population of around 1.5 billion people and its targeted 2021 gross-domestic-product growth rate of 6% make it an appealing market for growth investors.
Aveanna Healthcare (AVAH)
Aveanna Healthcare is a pediatric and adult home health care provider. The Atlanta-based company filed its IPO paperwork on April 1, but no IPO date is scheduled yet.
Aveanna’s business focuses on complex, high-cost patient populations. Its home caregivers are primarily skilled nurses. In the past five years, the company has expanded its geographical footprint from 17 states to 30 states, and it currently has 245 branch locations.
The health crisis created a boom in home health care demand last year. U.S. home health care spending is expected to reach $186.8 billion by 2027, according to the Centers for Medicare & Medicaid Services. That tremendous growth opportunity may be just what some health care IPO investors are looking for.
Aveanna reported $1.5 billion in revenue in 2020 and plans to trade on the Nasdaq under the ticker AVAH.
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