AIRLINK 62.48 Increased By ▲ 2.05 (3.39%)
BOP 5.36 Increased By ▲ 0.01 (0.19%)
CNERGY 4.58 Decreased By ▼ -0.02 (-0.43%)
DFML 15.50 Increased By ▲ 0.66 (4.45%)
DGKC 66.40 Increased By ▲ 1.60 (2.47%)
FCCL 17.59 Increased By ▲ 0.73 (4.33%)
FFBL 27.70 Increased By ▲ 2.95 (11.92%)
FFL 9.27 Increased By ▲ 0.21 (2.32%)
GGL 10.06 Increased By ▲ 0.10 (1%)
HBL 105.70 Increased By ▲ 1.49 (1.43%)
HUBC 122.30 Increased By ▲ 4.78 (4.07%)
HUMNL 6.60 Increased By ▲ 0.06 (0.92%)
KEL 4.50 Decreased By ▼ -0.05 (-1.1%)
KOSM 4.48 Decreased By ▼ -0.09 (-1.97%)
MLCF 36.20 Increased By ▲ 0.79 (2.23%)
OGDC 122.92 Increased By ▲ 0.53 (0.43%)
PAEL 23.00 Increased By ▲ 1.09 (4.97%)
PIAA 29.34 Increased By ▲ 2.05 (7.51%)
PIBTL 5.80 Decreased By ▼ -0.14 (-2.36%)
PPL 107.50 Increased By ▲ 0.13 (0.12%)
PRL 27.25 Increased By ▲ 0.74 (2.79%)
PTC 18.07 Increased By ▲ 1.97 (12.24%)
SEARL 53.00 Decreased By ▼ -0.63 (-1.17%)
SNGP 63.21 Increased By ▲ 2.01 (3.28%)
SSGC 10.80 Increased By ▲ 0.05 (0.47%)
TELE 9.20 Increased By ▲ 0.71 (8.36%)
TPLP 11.44 Increased By ▲ 0.86 (8.13%)
TRG 70.86 Increased By ▲ 0.95 (1.36%)
UNITY 23.62 Increased By ▲ 0.11 (0.47%)
WTL 1.28 No Change ▼ 0.00 (0%)
BR100 6,944 Increased By 65.8 (0.96%)
BR30 22,827 Increased By 258.6 (1.15%)
KSE100 67,142 Increased By 594.3 (0.89%)
KSE30 22,090 Increased By 175.1 (0.8%)

NEW YORK: Wall Street investors with access to newly listed stocks at their exclusive IPO prices reaped huge returns in 2020, while retail investors who generally miss out on the best prices still made tidy gains.

Shares of companies that went public via IPOs or direct listings this year on average have surged 75%, with corporations that have yet to report a profit jumping more than twice as much as those with positive bottom lines, according to a Reuters analysis.

It is a stunning result in a year that saw stocks plunge when the Covid-19 pandemic rapidly spread in the spring and communities across the country went into lockdown, then turn around and scale fresh highs. In addition, companies seeking to list shares have been embraced on expectations they will benefit from low interest rates, eventual economic recovery and a rollout of vaccines.

The analysis includes about 200 companies that held IPOs in the United States this year, and a handful of direct listings from companies such as Asana and Palantir Technologies. About 70% of the companies listing their shares this year are not run profitably, according to Refinitiv data and company filings.

A non-professional investor who bought into all of 2020’s public listings at the closing price of each stock’s first day of trade would be up about 28% for the year, less than half the return of an investor who bought in at each IPO price. That is better than the S&P 500’s 15% gain so far in 2020, but far short of the over 40% gain that buying a Nasdaq index fund at the start of the year would have provided. Brokerage Citadel Securities has said that retail investors have accounted for as much as 25% of stock market activity in 2020.

Airbnb, 2020’s most hotly anticipated stock market debutant, is up 121% from the IPO price in its Dec. 10 listing. But based on Airbnb’s closing price on its first day on the market, the stock is up just 4%.

The median IPO return, which reduces the influence of the most extreme winners and losers, so far in 2020 is 51%, shrinking to a more modest 13% based on closing prices after the first trading days. Chinese online retailer Wunong Net Technology was this year’s strongest-performing US IPO stock, up almost 700% since its listing on Dec. 15, according to Refinitiv data. Investors buying Wunong Net at the close of its first trading day would be up about 230%.

Comments

Comments are closed.