IPOs in the new year under the microscope: These companies want to go public in 2024

• Douglas wants to celebrate the stock market comeback in Frankfurt
• The IPOs of Alibaba’s logistics division, Ampere and Circle are also likely to attract attention
• Will SpaceX/Starlink, OpenAI or TikTok soon venture onto the trading floor?

Review: This is how the stock market year 2023 went in terms of IPOs

2023 was definitely not a particularly exciting year when it came to new IPOs. The number of IPOs (Initial Public Offerings) was limited both in Germany and on the other international capital markets. There were a few important reasons for the IPO lull, which has been going on since the beginning of 2022: First and foremost, the high key interest rates, stubborn inflation, the weakening global economy and geopolitical uncertainties in the wake of the wars in Ukraine and the Middle East. The result was weak stock market sentiment.

The only things that attracted significant attention were the IPOs of the British chip company Arm and the traditional sandal manufacturer Birkenstock – both on the New York Stock Exchange (NYSE) -, the Tyssenkrupp hydrogen subsidiary nucera on the German stock exchange and the IPO of the former Novartis generics division Sandoz the Swiss stock exchange.

Will there be an IPO revival in 2024?

But that could change in 2024, say experts at Goldman Sachs. They expect the IPO market to recover: “We are more optimistic that the IPO market will recover significantly in 2024 from the low in 2023,” said Michael Bruun, Global Co- Head of Private Equity at Goldman Sachs Asset Management, told Yahoo Finance. In his opinion, the resumption of IPOs will be primarily due to the fact that the interest rate peak has been reached and the Fed will gradually reduce key interest rates again in 2024. This would make stocks become more popular again. History shows that a market environment characterized by key interest rate cuts has a positive effect on the dynamics of the IPO landscape. “When expectations develop in such a way that people expect interest rates to fall, then IPOs usually increase,” said Bruun.

Below, some companies that are expected to go public in 2024 are examined in more detail.

Douglas: Düsseldorf perfumery chain with stock market ambitions

The first IPO candidate comes from Germany, more precisely from Düsseldorf. It has been known for some time that the owner CVC Capital Partners wants to bring the Douglas perfumery, whose history can be traced back to 1821, to the Frankfurt Stock Exchange in order to raise fresh capital for future expansion. As Bloomberg reported, CVC is aiming for a valuation of seven billion US dollars for Douglas.

Douglas currently operates more than 1,800 stores across the European continent and recorded sales of 3.7 billion euros in the 2021/22 financial year, with Douglas placing a focus on expanding its online shopping offering in recent years. In fact, a Douglas IPO would not be a first-time public offering, but rather a comeback. Douglas was already listed until 2013, but was then delisted at the instigation of the then new main investor Advent and the Kreke family. In 2015, the Luxembourg financial company CVC Capital Partners took over the majority and now obviously wants to go public again with Douglas.

Circle: Stablecoin provider now wants to go public itself

Another IPO candidate for 2024 comes from a completely different sector: Circle. The US crypto company is the second largest issuer of stablecoins in the world after Tether. Circle’s flagship investment product is the US dollar stablecoin USD Coin (USDC), which has become the first choice for professional and institutional crypto investors since its launch in September 2018. According to Bloomberg information, Circle has plans to go public in 2024.

This isn’t the first time Circle has considered an IPO. Circle had already planned this step in 2022 and was aiming for a valuation of nine billion US dollars on the NYSE. But then the company dropped its IPO plans due to the weak market environment, especially in view of the severe slump in cybercurrencies. Now the time has come and the first preparatory discussions for the IPO have already begun.

However, a spokesman for Circle did not want to reveal any details to Bloomberg and only emphasized: “Listing as a US company on the stock exchange has long been part of Circle’s strategic ambitions. We do not comment on rumors.” One can only speculate about the level of Circle’s valuation. The USDC stablecoin has a market capitalization of a good 24.5 billion US dollars (as of November 28, 2023) and is currently very profitable thanks to the increased key interest rates, as stablecoins are backed by stable assets such as US government bonds. As “BTC-ECHO” writes, the currently high interest income flows into the pockets of the issuing companies, such as Tether or Circle.

Ampere: Tesla competitor from Renault

Renault also has great ambitions when it comes to IPOs. This is what the French automaker wants its to be Electric cartake the division public under the name Ampere. The IPO is scheduled to take place in spring 2024, but a specific date is still unknown. Nissan plays a big role in the Ampere IPO. The Japanese car company has been cooperating closely with Renault for several years, and the partnership is to be intensified, particularly in the area of ​​electric cars. According to Reuters, Nissan is planning to invest up to 600 million euros in Renault’s electric car division, for which Nissan will receive a seat on Ampere’s board of directors in return.

At the International Motor Show (IAA) in Munich at the beginning of September 2023, Renault boss Luca de Meo expressed his confidence that Ampere could be valued at a sum of “eight, nine, ten billion” euros. However, de Meo did not want to give any further comments on Ampere’s possible valuation. “It’s not me who sets the price. The only thing I can do is give some details and we will do that next week, we will go to New York, we have to go to the investors,” de Meo assured loudly “Financial Times”. However, de Meo’s estimates may turn out to be too optimistic. The major Swiss bank UBS only believes that Ampere will have a valuation of three to four billion euros if it goes public.

Cainiao Network Technology: Alibaba’s logistics division

Will China stocks make a comeback in 2024? At least the valuations of Chinese companies seem to be quite cheap by international standards, as shares in companies such as Alibaba, Tencent and Pinduoduo have been caught in a constant downward trend for years. Now China investors can probably add another company to their buying list in the future. According to Reuters information, Alibaba is planning to bring its logistics division Cainiao Network Technology onto the stock exchange floor.

The Chinese tech giant with an extensive corporate network announced in March that it wanted to straighten out its corporate structure and divide the company into six divisions. Cainiao is expected to be one of these six new companies and could raise between $1 billion and $2 billion in an IPO. This is a rather small amount by Alibaba standards, which is due to the fact that Cainiao is only responsible for around six percent of total group sales. Among other things, Cainiao provides the software for Alibaba’s distribution centers.

Does Musk want to take Starlink and SpaceX public soon?

In addition to the IPO plans of the four companies above that have already been more or less officially announced, there are a whole series of companies whose alleged IPO is being speculated in investor circles. Elon Musk’s SpaceX/Starlink company is in the IPO pipeline. According to Musk, Starlink, SpaceX’s satellite internet division, recently became profitable for the first time – achieving profitability was always viewed by Musk as an important prerequisite for the long-term goal of an IPO. Starlink now operates 5,000 satellites, making it the largest satellite operator in the world, while SpaceX, with an off-market valuation of $150 billion, is the most valuable space and defense company in the Western world, ahead of Boeing. It is believed that Musk wants to take the two companies separately on the stock exchanges. However, the timing of the IPO is still up in the air. What is certain, however, is that the two IPOs should not only be of interest to Musk fans, given the current importance of Starlink and SpaceX and the enormous growth potential.

Which companies are apparently also aiming for an IPO

There are many other well-known companies – particularly many of them from the tech sector – whose company shares are likely to be publicly traded in the future. The IPO plans of OpenAI, the company behind ChatGPT, recently attracted a lot of attention. The launch of the AI ​​chatbot in November 2022 sparked enormous attention around the globe and set off a hype around the AI ​​topic that continues to this day. An IPO by the Chinese social media platform TikTok is also likely to attract enormous attention. The platform is backed by the Chinese company ByteDance, which leads the list of global unicorns with a market value of $200 billion. In view of the considerable capital injection that would result from this, ByteDance is likely to be interested in spinning off its jewel TikTok, writes “Computer Bild”. Finally, we would like to point out another candidate for a potential IPO: Reddit. Since the hype surrounding meme stocks like GameStop or AMC Entertainment, the US discussion platform with 52 million active users is likely to be known to most investors. Over-the-counter, Reddit is already valued at ten billion US dollars, and the trend has been rising recently. However, it remains to be seen whether and when a Reddit IPO will actually take place.

Editorial team finanzen.net