Fintechs Drive Busiest December for IPO Market in the Last 5 Years

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Fintechs Drive Busiest December for IPO Market in 5 Years

The IPO market enjoyed a late-year comeback as demand for fintech stocks overcame negativity from the failed WeWork deal.

At least $2.7 billion of initial public offerings have priced this month, according to ClickIPO. It was the busiest month since September and the highest total for a December since 2014.

Brazilian online brokerage XP (XP) was the biggest transaction at nearly $2 billion in size. Its shares are up more than 40 percent from their $27 IPO price. The offering also came at a potentially interesting time as pro-business reforms fuel a rally in the South American country.

A pair of payment processors for small- and midsize businesses followed:

  • China-based OneConnect (OCFT) raised $312 million on December 12. It’s little changed since pricing on December 12.
  • Bill.com (BILL), based in the heart of Silicon Valley, has roughly doubled since raising $216 million on December 11.

The active December seemed to break a mini-slump in the IPO market caused by WeWork’s high-profile failure in September. Other prominent names this year like Uber (UBER), Pinterest (PINS), Lyft (LYFT) and Slack (WORK) also struggled.

Uber (UBER) chart, with 50-day moving average.
Uber (UBER) chart, with 50-day moving average.

Democratization of the IPO Market?

 ClickIPO app with upcoming offerings.
ClickIPO app with upcoming offerings.

Something else happened in December: U.S. Securities and Exchange Commission Chairman Jay Clayton proposed changing IPO rules that date back to the 1930s. The new guidelines, published on December 18, would redefine “accredited investor” based on experience level rather than wealth and income.

That could potentially widen the base of potential buyers for IPOs to less-affluent savers working in the financial-services industry.

TradeStation clients also have access to some offerings before they’re public thanks to a relationship with ClickIPO. Its mobile app tracks deals and provides information on companies before they go public. It can also be linked to brokerage accounts to place orders.

In conclusion, 2019 began with high hopes of major deals. Many of those struggled but investors still embraced smaller innovators in the technology space. Will you be ready next year if the trend continues?

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