5 Of The Most Popular IPOs Of 2021 Are -47.3% Below All-Time-Highs: Is It Time To Be Cautious With IPOs?

2021 is the most intensive IPO year since the dot-com bubble burst in 2000. We saw immense volatility, especially with long-awaited IPOs during the first few days of trading. But it seems to be a common pattern right now that investors quickly lean towards new IPOs instead of staying invested in the longer term.

Here is a list of five highly anticipated IPOs in 2021 who saw intense gains but lost -47.3% on average from their all-time highs.

Rivian Automotive Inc.

The young electric-vehicle maker Rivian Automotive Inc. RIVN debuted eleven years after Tesla Inc. TSLA on November 10, 2021. The IPO price was set to $78.

The stock of Rivian Automotive Inc. opened at $106.75, rallied as high as $119.46 and closed at $100.73 on the first trading day. Four trading days later, Rivian Automotive Inc. marked its all-time high at $179.47.

Currently, the price per share is -32% below its all-time-high at $122.12 with a market cap of 110.22B. A new surge in the EV market could also be beneficial for the shares of RIVN.

Didi Global Inc.

Didi Global Inc. DIDI is a Chinese ride-hailing giant and had its trading debut on the New York Stock Exchange on Wednesday, June 30, 2021. The IPO offer price was $14.00. On the first day of public trading, the stock opened at $16.65, ran to the all-time-highs of $18.01 and immediately collapsed down as low as $14.10 to close near its lows at $14.14.

Since the first trading day, the stock fell lower and lower to its all-time low of $5.82 on December 6, 2021. The recent decline was triggered by delisting news. Didi Global plans to delist from NYSE only months after going public. Currently, the price per share is -61.4% below all-time-highs with a market cap of 43.14B.

Robinhood Markets Inc.

Robinhood Markets Inc. HOOD opened trading at the official IPO price of $38.00 on July 29, 2021. On the first trading day, the price per share peaked at $40.25 and closed significantly lower at $34.82. The subsequent rally came unexpectedly to the majority of market participants. Short-sellers were hit pretty hard when the price per share skyrocketed as high as $85 on August 4, 2021.

Robinhood Markets Inc. makes the most money from payments for order flow. In 1-9/2021 Robinhood Markets Inc. earned $759,808,799 vs. $465,736,035 in 1-9/2021. However, the PFOF income consolidates on a mid-range level. Also, investors fear that the payments for order flow could be banned or more heavily regulated with lower income potential for Robinhood Markets Inc.

At the moment, the shares of Robinhood Markets Inc. are 72.1% below all-time highs at $23.72.

Coupang Inc.

Coupang Inc. CPNG is a South Korean e-commerce giant founded in 2021 by Bom Kim and had its market debut on NYSE on March 11, 2021. The IPO of CPNG was one of the biggest in 2021, but the price per share development shows similarities to the other long-awaited IPOs in this list.

On the first day of trading, Coupang Inc. opened at $63.50, peaked at $69, just to fall as low as to $49.25, where the stock closed trading. The price per share never made it back to the all-time high at $69 market on the first trading day. Instead, the stock had bad times and fell to its lows of $25.06 on December 2, 2021. Currently, the price per share is $28.05, which is -59.3% below the all-time high.

Deutsche Bank changed its rating from hold to buy on August 12, 2021, while JP Morgan and Credit Suisse still rated it neutral.

Roblox Corporation

Roblox Corporation RBLX is the best-performing IPO on the list. The first trading day of RBLX was on March 10, 2021, with a first traded price of $64.50. Even though that the first officially traded price was well above the IPO price of $45, the stock surged from $64.50 to $74.83 on the first day of trading.

Then, the stock traded in a tight range between $60 and $100 for 9 months before it broke out on better than expected earnings announced November 8, 2021, after market close.

Roblox Corporation still has a negative EPS of -0.72, but investors see immense potential for Roblox as a big player in the metaverse. The price per share is currently just 11.9% below its all-time high.

Summary

In 2021 we saw high volatility across all popular IPOs. Investors who got shares for the IPO price still see a positive performance for some stocks, while the majority is well below its all-time highs. Market segments like electro vehicles and metaverse-related business see the highest demand right now. The IPO of Discord with a potential value of $15B is one to keep in mind once plans become more concrete.

Alexander Voigt is the Chief Executive Officer and founder of daytradingz.com. He does not hold any positions in the mentioned stocks.