The 2021 initial public offering (IPO) market was active, to say the least. In a year riddled by Covid-19 fears, economic uncertainty and market turbulence, over 950 organisations took the leap of faith and went public.
Although a large proportion of these companies are currently trading below their offer prices, a few standout names, particularly in the technology sector, have exceeded expectations and caught the attention of retail and institutional investors worldwide.
Primarily measured by share price performance since their initial listing, this article will look at the top five most successful IPOs of 2021, and consider their future prospects in light of the ongoing Covid-19 crisis.
#1. DigitalOcean (NYSE:DOCN)
DigitalOcean is an American cloud hosting provider that offers cloud computing services to business entities wishing to scale applications to run simultaneously on multiple computing devices. With a March IPO price of $47, the company suffered a difficult first few months as a publicly traded company and didn’t reach its original share value until June. Since then, however, DigitalOcean’s share price has almost doubled, closing at $87.31 on Thursday 9th December.
With the increasing threat of further restrictive measures being imposed by governments across the world, DigitalOcean’s services could be in high demand in the near future. In the UK for example, the Prime Minister has already advised employees to work from home. Such constraints are likely to push businesses towards using DigitalOcean’s services and consequently give rise to increases in the firm’s profitability.
#2. Roblox (NYSE:RBLX)
Founded in 2004, Roblox Corporation (Roblox) has grown to become one of the biggest video game developers in the world. Its IPO in March marked the first major tech listing of the year and was widely regarded as being the most highly anticipated gaming company public debut in recent times. In the first few days after its initial listing, Roblox’s stock surged 43% above its reference price of $45 and has experienced a generally positive trend since then.
With the emergence of the Omicron variant, it is likely that people will spend more time indoors and, as was the case in the first lockdown, this is likely to result in higher demand for electronic gaming products. As such, Roblox’s share price rise looks set to continue in the near future.
#3. Rivian (NASDAQ:RIVN)
Last month, electric vehicle maker Rivian went public in what turned out to be one of the largest IPOs of 2021. After soaring above its IPO price in the first few days of trading, the company’s stock has yielded more modest returns over the past few weeks, closing at $115 on Wednesday 15th December.
The electric vehicle market has received a lot of positive media attention and attracted much interest from the general public this year. With this set to continue in 2022, Rivian’s investment prospects look bright. The American company’s recent partnership with Amazon and large volume of pre-orders for its products provide further reason to believe its stock will perform well next year.
#4. AppLovin (NASDAQ:APP)
AppLovin is an American mobile technology company operating within the mobile gaming and app marketing services markets. After raising $1.8 billion through its IPO in mid-April, the company’s share price endured a bit of a rocky patch, not reaching its original IPO price of $80 until June. AppLovin’s stocks since then though have been on a general uptrend, with major price increases throughout October and November.
AppLovin has a consensus rating of ‘buy’ going into the new year, with an average price target of $110.40 – 38% above its IPO reference price. The optimism around the American-based company is largely down to the fact that its financial condition is considered to be extremely healthy compared to its competitors. AppLovin’s revenue grew by 87.8% over the past year and has continued to rise quarter-on-quarter in 2021. In addition, the firm has diversified its products, services and operations across a wide variety of industries within the technology sector, which will help limit its risk exposure to any one market.
#5. Oatly (NASDAQ:OTLY)
Although this final IPO has been rather unsuccessful in terms of share price performance since its initial listing as a public company, its inclusion in the top 5 IPOs of 2021 is purely on the basis of its expected price action in 2022. Since its IPO in May, Oatly, a Swedish food company that produces alternatives to dairy products from oats, has suffered consistent losses in its share price.
Despite its negative stock price movement, the positive macroeconomic trends surrounding Oatly and the dairy-free product industry in general indicate demand for these products are likely to increase sharply over the next few years as more people in developed countries adopt healthier lifestyles. According to a study conducted by Nasdaq, sales of oat milk are predicted to grow 13.4% per year over the five years between 2021 and 2026, reaching a total of $6.8 billion.