Investments

IPOs Get Push, But Not From Big Tech Outfits

Initial public offerings, or IPOs for short, may be making a comeback, but to call it a comeback necessitates IPOs viewed through a narrow lens.

As The Wall Street Journal reported, some of the biggest and most marquee names in tech, such as Airbnb, have been hesitant to raise money by going public, casting a wary eye on valuation. Specifically, these larger firms have been holding off on debuting on the public markets tied in part to concerns that once public, these firms would be valued at a discount to where they’d been valued privately.

The headline numbers have shown that the dollar that came from firms coming public this year so far stands at $18 billion, and the pipeline is at levels not seen since 2014. The WSJ pointed out that firms that are prepping for public listings include MongoDB, the data analytics outfit. This firm is slated to be valued at least above $1.6 billion, the implied valuation during its last investment round. Others include Switch, which operates data storage facilities and is likely to carry a market cap of at least $2 billion upon listing later in the year.

And yet among these billion-dollar and $2 billion listings, the absence is palpable where bigger firms have stayed away from the same return to markets. The roster of those proving gun-shy, said the WSJ, include Uber Technologies and, as noted, Airbnb. Those firms may not bow till next year, said the financial publication. And this comes against a backdrop where companies that have come public this year and in 2016 are up double-digit percentages. Among the fodder for the skittish: Cloudera went public last month but at levels below its previous and private $4 billion valuation. That may keep private firms private amid capital that is plentiful from VC and other investment coffers.

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