By: Ian Cooper
2018 was quite a year for IPOs.
In fact, there were 188 of them, raising up to $45.7 billion. By the way, that’s about 47% greater than 2017. Unbelievably, 2019 could be even more impressive.
Granted, major stock indices are in correction territory, and more economist calling for a recession by 2020, and it may not see like there’s much to get excited about for 2019.
However, with massive tech companies like Uber and Lyft likely to go public in the New Year, analysts believe we could see valuations as high as $100 billion. That alone would create another record-breaking year.
Three of the Top IPOs to Watch for the New Year
Hot IPO No. 1 – Uber
No company has attracted more attention in recent year than Uber.
All as the ride-sharing service has disrupted traditional travel in taxis around the world. At current pace, Uber could be valued as much as $120 billion. If that were to happen, it’d be the biggest offering since Alibaba went public in 2014.
While $120 billion may seem excessive, analysts are betting on significant opportunities in ridesharing. Plus, the company is rapidly growing and expanding with Uber Eats, Uber Freight, and Uber Elevate. It’s even investing in self-driving cars and drone deliveries.
However, there are some red flags.
Of one, Uber lost $891 million in the second quarter of 2018 following a loss of $4.5 billion in 2017. However, it does see revenue of $10 billion to $11 billion, up from $7.78 billion from 2017. That represents growth of 29% to 41%.
Hot IPO No. 2 – Lyft
Lyft was valued at $15.1 billion in June, when it raised $600 million, signing on JP Morgan to lead the offering. According to The Wall Street Journal, it could IPO by March or April 2019. If that’s the case, it would beat Uber for listing, and would offer investors their first opportunity to buy into the ride-sharing industry.
According to Forbes, “Lyft is growing faster and losing less money than Uber. The Journal reported that Lyft's third quarter 2018 revenues popped 88% to $563 million coupled with a whopping $254 million net loss. That is much faster growth than Uber -- which saw revenue increase 38% to $2.95 billion with a $1.07 billion loss.”
Hot IPO No. 3 – Palantir
Data-mining company Palantir Technologies could one of the biggest IPOs next year as well. According to The Wall Street Journal, the company had talks with Credit Suisse and Morgan Stanley to go public in the second half of 2019, and could be valued at as much as $41 billion.
Such as valuation of $41 billion would be a lofty one, though. The company recently told investors it expects around $750 million in revenue for 2018, up from roughly $600 million a year earlier. With a $41 billion valuation, the company would be valued at 55x revenue.
Co-founded by Peter Thiel, Palantir has made quite a name for itself, analyzing large volumes of data for intelligence agencies and governments. Its technology is credited for helping to track down Osama bin Laden, and for disrupting terrorist networks.
Again, major stock indices are in correction territory, and more economist calling for a recession by 2020, and it may not see like there’s much to get excited about for 2019.
However, there may be 100 billion reasons to get excited about – especially with IPOs in 2019.