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| Category | Details |
| Number of companies that went public | Approximately 197 companies |
| Notable companies that went public | Spotify, DocuSign, Dropbox, Zscaler, Moderna, Eventbrite, Aston Martin |
| Number of companies that have been acquired | Several, including DocuSign and Dropbox |
| Largest company that went public | Spotify (valued at around $25 billion) |
In 2018, many companies made headlines by having their initial public offerings (IPOs). This year was exciting for investors and marked a big rise in tech companies going public. With strong demand for new stocks, it was a great time for businesses to join public markets. Keep reading to learn about some of the noteworthy companies and their IPO journeys.
A Look at 2018’s Public Debuts
The year 2018 saw many new companies enter the public market. In total, 197 businesses launched initial public offerings (IPOs) in the United States. Technology was a big part of the story.
Some key facts:
- 38 tech companies joined the stock market.
- That’s almost twice as many as the year before.
- Investors seemed excited about these tech businesses.
The good economy likely helped. People wanted to support new ideas and inventions. Many companies likely saw 2018 as a good time to get funds.
Tech was growing fast. Folks looked for new chances. With more tech firms going public, choices grew. This trend may continue as technology advances.
In summary, 2018 offered many first-time shares, especially in technology. It showed strong interest in new companies and their products. The year highlighted how technology is changing business.
Major Events Affecting Stock Markets in 2018
The US-China Trade Situation
Source: South China Morning Post
In 2018, rising trade taxes between the United States and China caused concern on Wall Street. Each country started charging the other for more of its exports. This made business tougher. Understandably, many investors felt uneasy about what may happen.
The trade situation notably affected China’s financial markets. The Shanghai Composite, a key China stock gauge, dropped sharply. By mid-year, it had entered a “bear market” meaning prices fell a lot from their peak.
Traders were uncertain how things might unfold. This doubt caused market instability. Companies worried over profits and future growth. The ongoing back-and-forth led to caution from investors worried about new charges. In summary, the developing trade dynamics between the US and China influenced confidence and stability on Wall Street during 2018.
The Federal Reserve’s Interest Rate Adjustments
In 2018, the Federal Reserve, which helps guide the US economy, upped rates four times. This left some investors feeling unsure. Higher rates can slow economic expansion. When rates rise, businesses pay more to borrow (1).
Profits may fall as a result, potentially impacting stock prices. Investors began considering how these rate changes might affect their portfolios.
Another key sign was a flatter yield curve. The yield curve shows the gap between short-term and long-term interest. A flatter curve has sometimes pointed to recession, boosting unease about what lay ahead. This led investors to rethink strategies and holdings, helping create a more careful mood in the market.
Market Fluctuations in 2018
The stock market saw significant volatility last year, especially later in 2018. After the S&P 500 index hit record highs in September, it fell sharply from that peak.
Daily price swings became more common on Wall Street. Traders understandably felt uneasy watching values rapidly rise and fall.
The VIX index, a gauge of market movement, jumped up high. That signaled traders were feeling anxious. Various economic signals and global tensions also contributed to concern. All together, these created an atmosphere of uncertainty. As a result, many investors leaned toward more caution with their portfolios, leading to a rollercoaster ride on Wall Street in 2018.
Political Developments Contributed to Uncertainty
Politics added to Wall Street’s worries in 2018. In December, a federal government shutdown concerned many traders about the economic impact.
Meanwhile, Brexit’s unclear path troubled markets in Europe. Major stock gauges across the continent declined amid this confusion. Investors grew cautious that political instability could impact their portfolios.
Together, these political challenges made it difficult for traders to feel confident. As a result, plenty chose to take a more careful stance by limiting spending and investments. This extra hesitance further contributed to overall stock market instability. The doubts surrounding government actions and global relations kept traders feeling on edge throughout the year.
Growing Attention on Tech Companies’ Data Practices
In 2018, major technology firms faced mounting questions around data privacy. The Cambridge Analytica scandal involving Facebook sparked serious concerns among traders. Many pondered how these businesses might face stricter oversight down the line.
This increased scrutiny made investors less confident in tech stocks. As doubts rose, the whole market felt the impact since tech companies had powered gains in prior years. Traders began re-examining their tech holdings, leading to price fluctuations.
Worries over privacy and potential regulation altered perceptions of the tech sector. Investors were not as quick to jump into tech stocks, which once seemed a sure thing. This shift contributed to more care in the overall investment environment.
Signs of Slower Global Economic Growth Emerged
Throughout 2018, evidence mounted that the worldwide economy was losing steam. Nations like China and some in Europe posted weaker expansion. This raised concern since slowing growth can translate to less spending by consumers and businesses (2).
As worries about the global situation increased, stock values dropped internationally. Many started thinking the economy may not remain as robust as hoped, contributing to additional market declines.
Investors grew anxious about how this slowing might impact their portfolios. The double-whammy of weaker growth and rising doubt made for a tough year. Faced with this, plenty opted to hedge their bets, adding to the downward pressure on share prices.
Cryptocurrency Prices Declined Sharply
The cryptocurrency market faced challenges in 2018. After hitting a peak late in 2017, many digital currencies plunged greatly in worth. This downturn rippled out to related sectors like blockchain tech and digital asset firms too (3).
Folks who invested in these virtual monies felt the impact. Seeing values fall made traders more careful about where to put their dollars. As prices dropped, faith in the crypto market weakened.
Traders started re-evaluating their plans. The buzz around cryptocurrencies had faded, leading to added prudence. This market adjustment underscored the risks in investing in digital currencies and made traders leery of similar speculative bets going forward.
Stock Market Performance in 2018
Due to the various events, 2018 proved one of the worst years for stocks since the 2008 financial crisis. The Dow Jones Industrial Average dropped approximately 5.6%, while the S&P 500 fell around 6.2% (4). This marked the first down year for the S&P 500 since 2008, signaling a major shift in market sentiment.
December was particularly tough, with big losses that left many fearing it would go down as one of history’s worst months for equities. The mix of trade tensions, interest rate increases, and political uncertainty created a perfect storm.
Investors felt anxious and unsure about what lay ahead. Many pulled back on investments, adding to further declines. The overall stock market performance for 2018 reflected the growing concerns and challenges faced by traders throughout the year.
Key Insights of IPOs in 2018
The IPO activity in 2018 revealed several important insights about the market.
- Rise of Unicorns: The year saw many “unicorn” companies enter the market. These are startups valued at over $1 billion. Their arrival showed strong investor interest in innovative businesses. Investors were eager to support new ideas and technologies.
- Diverse Sectors: While technology led the way, other industries also made notable entries into public markets. Healthcare and automotive companies joined the mix. This diversity highlighted that investors were looking beyond just tech for growth opportunities.
- Investor Confidence: The demand for shares in newly public companies indicated high investor confidence. Many people believed in the potential of these businesses, especially in tech and digital services. This enthusiasm helped fuel the IPO market throughout the year.
- Market Variability: IPO performance varied widely based on sector and market conditions. Some companies experienced substantial gains shortly after going public. Others struggled to maintain their value. This variability reminded investors that not all IPOs guarantee success.
These insights help paint a clearer picture of the trends and dynamics in the IPO market during 2018. Understanding these factors can guide future investment decisions.
Notable Companies that Had Their IPO in 2018
- Spotify
- Country: Sweden
- Stock Exchange: New York Stock Exchange (NYSE)
- Industry: Music Streaming
- IPO Price: Valued at around $25 billion
- IPO Date: April 3, 2018
Spotify took a unique route with a direct listing. This method allowed current shareholders to sell their shares directly without the usual underwriting process. It was a big move that showed confidence in the company. Spotify’s listing marked a significant moment in the music industry, as it highlighted the growing popularity of streaming services.
- DocuSign
- Country: United States
- Stock Exchange: NASDAQ
- Industry: Software—Application
- IPO Price: Raised about $629 million
- IPO Date: April 27, 2018
DocuSign is known for its electronic signature services. On its first day of trading, shares jumped more than 30%, showing strong demand for digital solutions. This success reflected a growing trend toward online services and the need for convenient, secure ways to sign documents.
- Dropbox
- Country: United States
- Stock Exchange: NASDAQ
- Industry: Cloud Storage
- IPO Price: Raised over $750 million
- IPO Date: March 23, 2018
Dropbox had one of the largest tech IPOs of the year. Its strong brand and loyal user base helped it succeed. Investors were excited about its potential for growth in the cloud storage market. The IPO marked a key moment for the company, as it transitioned from a private to a public entity.
- Zscaler
- Country: United States
- Stock Exchange: NASDAQ
- Industry: Cybersecurity
- IPO Price: Shares doubled soon after its IPO
- IPO Date: March 16, 2018
Zscaler focuses on cybersecurity solutions. Investors were eager to support the company amid rising digital threats. The strong demand for its shares reflected a growing awareness of the importance of online security. This enthusiasm helped Zscaler establish itself in a competitive market.
- Moderna
- Country: United States
- Stock Exchange: NASDAQ
- Industry: Biotechnology
- IPO Price: Raised about $604 million
- IPO Date: December 7, 2018
Moderna gained attention for its role in developing mRNA vaccines during the COVID-19 pandemic. The company’s IPO was significant, as it raised funds to support its innovative research. Investors were excited about its potential to revolutionize medicine and public health.
- Eventbrite
- Country: United States
- Stock Exchange: NYSE
- Industry: Event Management
- IPO Price: Raised about $230 million
- IPO Date: September 20, 2018
Eventbrite is a platform for managing events online. The company tapped into the growing trend of online event management. Investors recognized the potential for growth in this area, leading to a successful IPO. The funds raised would help Eventbrite expand its services and reach more users.
- Aston Martin
- Country: United Kingdom
- Stock Exchange: London Stock Exchange
- Industry: Automotive
- IPO Price: £19 per share
- IPO Date: October 3, 2018
The luxury car brand Aston Martin went public on the London Stock Exchange. The IPO price of £19 per share attracted a lot of media attention. Investors were eager to see how the iconic brand would perform in the public market. The listing marked a new chapter for Aston Martin as it aimed to grow its presence in the automotive industry.
Market Dynamics and Trends
Source: unsplash.com (Photo by: Anne Nygård)
Several factors shaped the IPO landscape in 2018. These elements influenced how companies approached going public.
- Strong Financial Performance: Companies that showed solid revenue growth attracted investor interest. Investors wanted to see numbers that indicated success. When businesses reported strong earnings, it made them more appealing. This trend encouraged more companies to consider an IPO.
- Favorable Market Conditions: Low interest rates created a good environment for IPOs. When borrowing costs are low, companies can invest more in growth. Positive economic signs also helped boost confidence. Investors felt more secure about putting their money into new stocks. This overall optimism made 2018 a better year for IPOs.
- Innovative Listing Methods: Spotify’s direct listing changed how companies could go public. This method allowed existing shareholders to sell shares directly without the usual underwriting process. It opened the door for other companies to explore similar options. More businesses began to consider direct listings as a way to enter the market.
- Cross-Border Listings: There was a rise in cross-border IPOs in 2018. Many Chinese companies chose to list on U.S. exchanges. These listings made up about 29% of all IPOs on U.S. exchanges. This trend showed that investors were interested in global opportunities. It also highlighted the growing connections between different markets.
These factors combined to create a dynamic and evolving IPO landscape in 2018. Understanding these trends helps investors see the bigger picture.
Conclusion
In conclusion, 2018 was a vibrant year for IPOs, with a mix of innovative companies entering public markets. Investors showed strong interest in tech-driven solutions, and the trends set in this year continue to shape the future of public offerings. These companies’ performances will be key indicators for market health and investor sentiment moving forward.
FAQ
How did the 2018 ipo market perform, especially for tech ipos and chinese tech companies?
The 2018 IPO market showed remarkable diversity, with companies like Tencent Music and Pivotal Software leading the tech sector. Chinese tech firms made their public debut despite challenging market conditions. Many companies went public on both the Nasdaq stock exchange and New York Stock Exchange, showing strong revenue growth across sectors.
What happened with notable companies like Blue Apron and Aston Martin when they launched their ipo?
Blue Apron and Aston Martin faced different paths after their public offerings. Blue Apron struggled with its business model in consumer goods, while Aston Martin saw high demand initially. Their day of trading experiences highlight how market conditions can impact a company’s stock price and buy rating.
How did cloud based companies and digital music companies perform in their public debut?
Cloud storage and digital music companies like Carbon Black showed promising returns since IPO. Companies offering products and services in cloud technology, along with music streaming services like Tencent Music, attracted significant interest from investors looking at revenue growth potential.
What role did stock exchange choices play for companies that had their ipo in 2018?
Companies strategically chose between public offerings on the nasdaq stock exchange and going public on the NYSE. Some opted for direct listing approaches. The choice of stock exchange and stock ticker symbol often reflected their business sector, whether health care, real estate, or tech.
How did companies like Getty Images and Unity Biotechnology handle their initial public offering?
These companies navigated different paths with their shares priced according to market interest rates. Unity Biotechnology represented the health care sector, while Getty Images brought its wholesale club model to market. Their press releases highlighted distinct approaches to going public.
What made Americold Realty Trust and Equitable Holdings stand out among the largest ipo events?
As some of 2018’s largest IPO events, these companies exemplified different sectors – real estate through Americold Realty Trust and financial services via Equitable Holdings. Their stock price as of sept showed how blank check offerings and traditional IPOs could both succeed.
How did Dell Technologies and Arlo Technologies approach their public offerings?
Both companies demonstrated different business models, with Dell Technologies bringing its autorenew packs and tech solutions, while Arlo Technologies focused on consumer products. Their IPO preparation and pricing strategies highlighted various approaches to entering public markets.
What influenced Mesa Air Group’s success among the best stocks of 2018’s IPO class?
Mesa Air Group’s performance reflected broader market conditions in transportation. Their stock performance and revenue growth caught investor attention, demonstrating how traditional industries could still produce some of the best stocks among new public offerings.
Some Notable Companies That Went Public in 2018
| IPO Date | Symbol | Company Name | Exchange |
| Jan 18, 2018 | ADT | ADT | NYSE |
| Jan 24, 2018 | PAGS | PagSeguro | NYSE |
| Feb 1, 2018 | OSS | One Stop Systems (OSS) | NASDAQ |
| Feb 8, 2018 | HMI | Huami | NYSE |
| Feb 8, 2018 | CDLX | Cardlytics | NASDAQ |
| Mar 16, 2018 | ZS | Zscaler | NASDAQ |
| Mar 16, 2018 | AIHS | Senmiao Technology | NASDAQ |
| Mar 23, 2018 | DBX | Dropbox | NASDAQ |
| Mar 28, 2018 | BILI | BiliBili | NASDAQ |
| Mar 29, 2018 | IQ | IQIYI | NASDAQ |
| Apr 3, 2018 | SPOT | Spotify | NYSE (Direct Listing) |
| Apr 10, 2018 | CBLK | Carbon Black | NASDAQ |
| Apr 12, 2018 | ZUO | Zuora | NYSE |
| Apr 20, 2018 | PVTL | Pivotal Software | NYSE |
| Apr 26, 2018 | CDAY | Ceridian HCM Holding | NYSE |
| Apr 27, 2018 | SMAR | Smartsheet | NYSE |
| Apr 27, 2018 | DOCU | DocuSign | NASDAQ |
| May 11, 2018 | HUYA | Huya | NASDAQ |
| May 17, 2018 | PS | Pluralsight | NASDAQ |
| May 24, 2018 | GSKY | GreenSky | NASDAQ |
| Jun 12, 2018 | AVLR | Avalara | NYSE |
| Jun 20, 2018 | IIIV | i3 Verticals | NASDAQ |
| Jun 25, 2018 | HYRE | HyreCar | NASDAQ |
| Jun 27, 2018 | EVER | EverQuote | NASDAQ |
| Jun 27, 2018 | UXIN | Uxin | NASDAQ |
| Jun 28, 2018 | DOMO | Domo | NASDAQ |
| Jul 26, 2018 | DAVA | Endava | NYSE |
| Jul 26, 2018 | CANG | Cango | NASDAQ |
| Jul 27, 2018 | OPRA | Opera | NASDAQ |
| Aug 1, 2018 | SONO | Sonos | NASDAQ |
| Aug 2, 2018 | ARLO | Arlo Technologies | NYSE |
| Sep 21, 2018 | FTCH | Farfetch | NYSE |
| Sep 25, 2018 | VIOT | Viomi | NASDAQ |
| Sep 26, 2018 | SVMK | SurveyMonkey | NASDAQ |
| Sep 27, 2018 | CTK | CooTek | NASDAQ |
| Oct 2, 2018 | UPWK | UpWork | NASDAQ |
| Oct 4, 2018 | ESTC | Elastic | NASDAQ |
| Oct 12, 2018 | PLAN | Anaplan | NASDAQ |
| Oct 18, 2018 | SWI | SolarWinds | NYSE |
| Oct 20, 2018 | NIU | Niu.com | NASDAQ |
| Nov 15, 2018 | WEI | Weidai | NASDAQ |
| Dec 5, 2018 | MOGU | MOGU | NASDAQ |
| Dec 12, 2018 | TME | Tencent Music | NYSE |
References
- https://edition.cnn.com/2018/12/19/business/federal-reserve-december-rate-hike/index.html
- https://www.imf.org/en/News/Articles/2018/07/25/na072618-chinas-economic-outlook-in-six-charts
- https://link.springer.com/article/10.1007/s10479-023-05575-0
- https://www.statmuse.com/money/ask?q=dow+jones+chart+by+year+2018-2023
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