An electric Rivian R1T pickup truck during the company’s initial public offering outside the Nasdaq MarketSite in New York, Wednesday, November 10, 2021.
Bing Guan | Bloomberg | Getty Images
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Rivian’s massive initial public offering last week pushed the total exit value of this year’s US public market listings beyond the unprecedented $1 trillion mark, a record doubling of 2020 levels, according to data compiled by PitchBook.
PitchBook data includes initial public offerings as well as direct listings and special purpose acquisitions, noting that 17% of this year’s aggregate valuation numbers came from SPACs.
The $1 trillion figure helps determine the suitability of public markets for new entrants and builds a larger pool of opportunities for investors to trade. However, it is also a data point that may help bolster the case for those who worry that some of the recent IPOs are summarizing an imbalance between valuation and fundamentals.
Late growth — between newly private and public companies — is a pocket of foam, according to Dibangan “DJ” Deb, CEO of Francisco Partners, a tech-oriented acquisition firm.
“Many unicorns today are truly disrupting the world and deserve their evaluation,” Depp said in an interview with CNBC’s Deliver Alpha News. “But it’s possible that 70-80% of them will get some sort of daily account. Not all of them are going to disrupt the world, and people are confusing growth with quality in the later stages of a bull market.”
Rivian’s massive initial public offering last week added about $67 billion to the total, and since then, it has more than doubled, with about $150 billion in circulation. (Although volatile stocks are down 14% in morning trading on Wednesday.)
However, the electric car maker achieved the second-highest listing valuation this year, after Coinbase debuted at $85 billion in April. The cryptocurrency exchange has added nearly $5 billion in market capitalization since that time.
In addition to the combined valuation, the issuance of US stocks also set a record. So far this year, $490 billion has been raised across IPOs, follow-ups, convertible bonds and SPACs, a 9% jump from 2020 levels, according to Goldman Sachs.
“With equity valuations at elevated levels, we expect the environment to remain favorable for the issuance of shares in 2022,” the company said in a recent note.