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Rivian’s blockbuster IPO last week pushed the total exit value for listings on the U.S. stock exchanges above an unprecedented $ 1 trillion mark this year, a record that is more than 2020 levels, according to PitchBook doubled.
PitchBook data spans traditional IPOs as well as direct listings and special purpose vehicles, noting that 17% of this year’s aggregated valuation metrics came from SPACs.
The $ 1 trillion figure helps quantify how hospitable the public markets have been to newcomers and creates a greater number of stocks for investors to trade. However, it’s also a data point that could back up the case for those who fear that some of the recent IPOs represent a shift between valuation and fundamentals.
According to Dipanjan “DJ” Deb, CEO of Francisco Partners, a technology-driven buyout firm, late-stage growth – both private and newly listed – is a bubble of foam.
“Many of today’s unicorns are actually upset and deserving of their appreciation,” Deb said in an interview for CNBC’s Delivering Alpha newsletter. “But probably 70-80% of them will have some sort of settlement day. They are not all going to change the world, and people bring growth and quality together in the late stages of a bull market.”
Rivian’s IPO last week added about $ 67 billion to the grand total and has more than doubled since then, trading around $ 150 billion. (Though volatile stocks were down 14% in morning trading Wednesday.)
Still, the electric vehicle maker scored the second highest valuation for a listing this year after Coinbase debuted in April with a valuation of $ 85 billion. The crypto exchange has added around $ 5 billion in market cap since that time.
In addition to the combined valuation, US equity issuance also hit a record. According to Goldman Sachs, $ 490 billion so far this year.
“With stock valuations at a high level, we expect the environment for stock issuance to remain favorable in 2022,” the company said in a recent statement.