What do these 4 IPOs tell us about the state of the market?

We’re digging into the final IPO prices set by fintech unicorn Marqeta and enterprise productivity unicorn Monday.com this morning. Briefly, it’s good news.

A small programming note: The Exchange is off next week. I am taking some time to do nothing other than eat, read books and lose at lawn games. Regular service will resume the week after.

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To catch up on this busy IPO week, Marqeta, Monday.com and two other IPOs are on the docket. The final pair are Zeta Global and 1stDibs, debuts that matter, if a bit less so for our purposes than the others.

We’ll unpack the final price of each, comparing it to its IPO valuation range and drawing a few conclusions about where we stand in the larger unicorn liquidity cycle.

This is familiar ground for us, but given the sheer flow of IPOs we cannot sit back and presume that our knowledge is current; things are happening with enough speed that regular revisions of our market views are key.

And we may have been too conservative before, so we have a bit of clean-up ahead of us.

Strong pricing

Why do we care about IPO pricing? After all, the DoorDash and Airbnb IPOs showed that the value at which a company opens life as a public entity can wildly differ from where bankers estimated it should be valued.

Two quick things: First, IPO pricing sets the terms for the floating company’s fundraise; IPOs are fundraising events that often take the place of one last private round, so their price matters from a dilution perspective. And a lot of the hottest IPOs from the last six months have given back some of their early gains, making their official IPO price relevant.

DoorDash, for example, priced at $102 before soaring as high as $256 per share after its debut. Today, the company is worth $135.50 in pre-market trading. That’s a lot closer to its IPO price than we might have anticipated after watching its first days as a floating stock.

So, this stuff really does matter, and the numbers that we see below will help private companies price their next venture rounds. Furthermore, strong public market pricing could help keep alive the current game of wealthy private groups like Tiger hunting ever-earlier-stage startups with promising — if nascent — growth rates.

https://ift.tt/3hBN9RE What do these 4 IPOs tell us about the state of the market? https://ift.tt/3iw2HJz