After a tough two years for the IPO market, more companies could venture to re-enter the trading floor in 2024. Among the candidates are some well-known companies with growth opportunities – worth a closer look.
• Douglas wants to celebrate the return to the stock exchange in Frankfurt
• The IPOs of Alibaba’s logistics division Ampere and Circle are also likely to attract attention
• Will SpaceX/Starlink, OpenAI or TikTok enter the business floor soon?
Review: This is how the 2023 stock year went in terms of IPOs
2023 certainly wasn’t a particularly exciting year for new IPOs. The number of IPOs (Initial Public Offerings) was limited both in Germany and in other international capital markets. There were several important reasons for this IPO calmwhich lasts from the beginning of 2022: The high ones come first Key interest ratesthe stubborn one inflation, a weakening global economy and geopolitical uncertainties due to the wars in Ukraine and the Middle East. The result was weak sentiment in the stock market.
Only UK chip company IPOs have attracted significant attention stilts and a traditional sandal maker Birkenstock – both on the New York Stock Exchange (NYSE) -, tyssenkrupp– Hydrogen daughter nucera on German Stock Exchange as well as the IPO of the former Novartis-General distribution Sandoz on the Swiss stock exchange.
Will there be an IPO revival in 2024?
But that could change in 2024, say experts Goldman Sachs. They expect the IPO market to pick up: “We are more optimistic that the IPO market will pick up significantly in 2024 from the trough in 2023,” Michael Bruun, global co-head of private equity at Goldman Sachs Asset Management, told Yahoo Finance. In his opinion, the resumption of IPOs will be mainly due to the fact that the interest peak has been reached and the Fed will gradually reduce key interest rates again in 2024. This would make the stock more popular again. History shows that a market environment characterized by a reduction in key interest rates has a positive effect on IPO dynamics. “When expectations develop so that people expect interest rates to go down, then IPOs usually go up,” Bruun said.
Some of the companies expected to go public in 2024 are examined in more detail below.
Douglas: Düsseldorf chain of perfumeries with ambitions on the stock exchange
The first applicant for the IPO comes from Germany, more precisely from Düsseldorf. It has been known for a long time that the perfumery is owned by the owner CVC Capital Partners Douglaswhose history can be traced back to 1821, wants to list on the Frankfurt Stock Exchangeto raise new capital for future expansion. As reported by Bloomberg, CVC is seeking a valuation of Douglas at seven billion US dollars.
Douglas currently operates more than 1,800 stores across the European continent, with sales of €3.7 billion in the 2021/22 financial year, with Douglas focusing on expanding its online shopping offering in recent years. In reality, the Douglas IPO would not be an initial public offering, but rather a comeback. Douglas was already listed until 2013, but was then delisted at the instigation of the then new main investor Advent and the Kreke family. In 2015, the Luxembourg financial company CVC Capital Partners took over the majority and now apparently wants to go public again with Douglas.
Circle: Stablecoin provider now wants to go public on its own
Another 2024 IPO candidate comes from a completely different sector: Ring. The American crypto company is po Tether the second largest issuer of stablecoins in the world. Circle’s main investment product is a USD stablecoin USD coin (USDC), which has become the first choice for professional and institutional crypto investors since its launch in September 2018. According to Bloomberg, Circle plans to go public in 2024.
This isn’t the first time Circle is considering an IPO. Circle had been planning this move as early as 2022, aiming for a $9 billion valuation on the NYSE. However, the company then abandoned its IPO plans due to the weak market environment, especially considering the strong fall in cryptocurrencies. Now the time has come and the first preparatory discussions for the IPO have already begun.
However, a spokesman for Circle did not want to reveal any details to Bloomberg, only emphasizing: “Listing as a US company on the stock exchange has long been part of Circle’s strategic ambitions. We do not comment on rumours.” The amount of Circle’s valuation can only be speculated. The USDC stablecoin has a market cap of a good 24.5 billion US dollars (as of November 28, 2023) and is currently very profitable due to increased key interest rates, as stablecoins are backed by stable assets such as US Treasuries. As “BTC-ECHO” writes, currently high interest income flows into the pockets of issuing companies such as Tether or Circle.
Ampere: Tesla competitor from Renault
Also Renault has big ambitions when it comes to IPO. This is what the French car company wants to have Electric cardivision under the name amp to bring the exchange. The IPO is expected to take place in the spring of 2024, but the specific date is still unknown. He plays a big role in the Ampere IPO Nissan. The Japanese automaker has been working closely with Renault for several years, and the partnership will deepen especially in the field of electric cars. According to Reuters, Nissan plans to invest up to 600 million euros in Renault’s electric car division, in return for which Nissan will get a seat on Ampere’s board of directors.
At the International Motor Show (IAA) in Munich in early September 2023, Renault boss Luca de Meo expressed his belief that the Ampere could be valued at “eight, nine, ten billion” euros. However, De Meo did not want to comment further on the possible award of Ampere. “I am not the one who determines the price. All I can do is provide some details and we will do it next week, we will go to New York, we have to be behind the investors,” assured de Meo out loud to the “Financial Times”. However, De Meo’s estimates may turn out to be too optimistic. The largest Swiss bank UBS Ampere only expects a valuation of three to four billion euros if it goes public.
Cainiao Network Technology: The logistics division of Alibaba
Will Chinese stocks bounce back in 2024? At least the valuations of Chinese companies appear to be quite favorable by international standards, as stocks from companies like Alibaba, Tencent or Pinduoduo have been caught in a constant downward trend for years. Now, Chinese investors can probably add another company to their shopping list in the future. According to Reuters, Alibaba is preparing to list its logistics division, Cainiao Network Technology.
The Chinese tech giant with an extensive corporate network announced in March that it wants to straighten out its corporate structure and split the company into six divisions. Cainiao is expected to be one of those six new companies and could raise between $1 billion and $2 billion through an IPO. That’s a relatively small amount by Alibaba’s standards, which is because Cainiao is only responsible for around six percent of the group’s total sales. Among other things, Cainiao provides software for Alibaba’s distribution centers.
Musk wants to take Starlink and SpaceX public soon?
In addition to the IPO plans of the four companies mentioned above, which have already been more or less officially announced, there are a number of companies whose alleged IPOs are being speculated in investor circles. Elon Musk’s SpaceX/Starlink prepares for IPO StarlinkAccording to Musk, SpaceX’s satellite Internet division recently became profitable for the first time – achieving profitability has always been considered an important prerequisite for Musk’s long-term IPO goal. Starlink now manages 5,000 satellites, making it the largest satellite operator in the world, while SpaceX still has an off-market value of $150 billion. Boeing is the most valuable space and defense company in the Western world. Musk is believed to want to take the two companies public separately. However, the timing of the IPO is still up in the air. What is certain, however, is that these two IPOs should not only be of interest to Musk fans, given the current importance of Starlink and SpaceX and the huge potential for growth.
Which companies are also apparently pursuing an IPO
There are many other well-known companies—especially many from the technology sector—whose company shares are likely to be publicly traded in the future. The IPO plans of OpenAI, the company behind ChatGPT, have attracted a lot of attention recently. The launch of an AI chatbot in November 2022 generated huge attention around the world and started a hype around the topic of AI that continues to this day. The IPO of Chinese social media platform TikTok is also likely to attract a lot of attention. A Chinese company is behind the platform Byte Dance, which with a market value of 200 billion dollars leads the list of global unicorns. Considering the significant capital injection that would result from this, ByteDance will probably be interested in spinning off its jewel TikTok, writes “Computer Bild”. Finally, another candidate for a potential IPO needs to be listed: Reddit. At least since the memes around shares à la GameStop or AMC Entertainment Most investors are probably familiar with the American discussion platform with 52 million active users. Free-market Reddit is already valued at ten billion US dollars and the trend has been rising recently. However, whether and when Reddit’s IPO will actually happen remains to be seen.
Finanzen.net editorial team