Home Listing rules From Deliveroo to Nightcap: the best and worst IPOs of 2021

From Deliveroo to Nightcap: the best and worst IPOs of 2021

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021 was a banner year for IPOs in the UK, with 108 listed companies, more than for all of 2020 and 2019 combined.

About two-thirds were in finance or technology and media, but the growth has spread. The main London market recorded its highest number of listings in four years, while IPOs on the junior AIM market fell from 16 in 2020 to 55 in 2021. The challenger Aquis Exchange has also seen more companies join its market in 2019 and 2020 together. The boom was fueled by pent-up demand built during the pandemic.

But bigger doesn’t always mean better. Some of the most famous names end the year far from their floating price.

A Deliveroo driver

/ REUTERS

“Deliveroo is on the speculative and high growth side and it has become less of an investor favorite,” said Neil Wilson, chief analyst at Markets.com. “Yes [it] can’t make money in a pandemic with everyone locked in, how will that be in the future? ”

Still, Deliveroo wasn’t the most obnoxious dish served on the stock market this year: the worst IPO of 2021 was Parsley Box, a Scottish PAO-focused meal delivery company whose chops of ground beef at £ 2.39 hasn’t whetted investor appetites. Its shares listed at 200p in March but are now down 77%.

“A lot of companies have entered the market after the 2020 recovery with very rich valuations, especially those in the ‘pandemic winner’ category,” Wilson said. “2021 has shown that these prices were probably never justified and inflated by the pandemic and the vast liquidity available to us as a result of fiscal and monetary easing. “

Shares of artificial intelligence firm Darktrace initially soared, helping it in the FTSE 100, but have quickly sank since then. It has now been relegated from the high-flying index but is up 59% from its IPO in April.

Susannah Streeter, Senior Investment Analyst at Hargreaves Lansdown, said: “There could be a comeback as there is a growing demand for sophisticated technologies to counter growing armies of cybercriminals. The ongoing digital switchover is likely to continue to open up new opportunities and markets for Darktrace as companies scale up operations to meet demand, while trying to keep their systems secure. ”

The best IPO of the year is the one you probably missed: Acceler8 Ventures, a front-buying company looking to take over a games, media, or software company. The names behind it seem to have won over small investors: Acceler8 ended this year up 285% from its July selling price of 100p. He said in September that he was “to continue[ing] pursue its investment and acquisition strategy and is currently evaluating national and international opportunities.

The AIM-listed Bens Creek Group, which extracts metallurgical coal used in steelmaking, also performed best thanks to growing demand for the metal. The shares have more than doubled since it was listed at 10%. per share in October.

Poppy Gustafsson, CEO of Darktrace

/ Poppy Gustafsson / Twitter

“There had been early indications that it would be a very popular IPO given that the initial offering was oversubscribed,” says Streeter. “The launch was seen as a vote of confidence for the London Stock Exchange as a worthy launching pad for both technology and pharmaceutical companies, especially given NASDAQ’s dominance in this space.”

Another success has been bar group Nightcap, owner of the London Cocktail Club and co-founded by former Dragons Den star Sarah Willingham. It is up 75% since it was listed at 10p per share almost a year ago on January 13, 2021.

London has maintained its position as the leading European market this year. Total IPO funds raised on the LSE exceeded £ 13.9 billion, ahead of Stockholm (£ 9.4 billion), Amsterdam (£ 7.2 billion) and Frankfurt (nearly £ 7 billion).

The Oxford Nanopore laboratory

/ Oxford Nanopore Technologies

Streeter is cautious: “The appetite will likely depend on the spread of the new variant and the effectiveness of the vaccines. Investors will be in a “wait and see” mode, assessing the global economic recovery, which is hampered by persistent supply chain problems. ”

Russ Mold, chief investment officer at AJ Bell, believes this year’s IPO boom will trigger more listings in 2022: if a particular industry or theme turns out to be particularly hot.

This will be the first year since the Financial Conduct Authority relaxed listing rules in a bid to make capital more attractive to tech companies after Brexit. Companies will be able to go public as little as 10% of their shares, up from 25% previously, and founders will be able to retain stronger control over companies.

“If we get an IPO boom [as a result of the relaxation], then investors will have to keep their cool, maintain their discipline, ensure quality control and fight against the fear of missing out, ”Molds adds.

All price data is correct as of December 17th and has been compiled by Hargreaves Lansdown for the Evening Standard.


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