This post was originally published on this site
https://i-invdn-com.akamaized.net/news/LYNXMPED641A7_M.jpg
Shares in Chinese toymaker Pop Mart International Ltd. jumped as much as 112% in their debut Friday, after home-rental platform Airbnb Inc. closed 113% above its IPO price in New York. JD (NASDAQ:JD) Health International Inc. surged 56% in its debut Tuesday while DoorDash Inc. soared 86% in on Wednesday.
The FTSE Renaissance Global IPO, which tracks the performance of offerings worldwide, is up 82% this year, compared with a 12% gain for MSCI’s All-Country Index. Comparing the current period with the dot-com bubble is hard to do directly because the Renaissance IPO Index didn’t start until 2009, and a Bloomberg index that was around in the dot-com boom became defunct in 2017.
There are some pretty clear similarities between the Bloomberg index versus the S&P 500 in 1998-99 and the Renaissance gauge now, noted Cameron Crise, a macro strategist at Bloomberg. The performance after that in the late 1990s was even more dramatic. If IPOs were to follow the same pattern now, they would have a huge jump still to come — before a pretty spectacular drop.
“The action in these names is definitely a concern for us,” said Matt Maley, a strategist at Miller Tabak + Co., speaking about the U.S. IPOs.
“However, we’d also note that experience tells us that froth in the IPO market tends to be a ‘leading indicator’ for an important top — not an ‘immediate indicator’ of a top. In other words, yesterday’s action in the IPO market probably tells us that we’ll see a meaningful correction at some point over the next six to nine months, not necessarily over the next few days/weeks.
