Which IPOs should you watch in 2024, and how can you benefit from them?

Although 2023 was marked by relatively low activity in initial public offerings (IPOs), some observers suggest that 2024 could see an increase in such transactions. 
 

Despite a strong recovery in the stock markets in 2023, the number of initial public offerings was relatively low in developed markets. Globally, the volume of IPOs declined by 8 percent and proceeds fell by 33 percent compared to 2022, with a total of 1,298 IPOs raising $123.2 billion.
 

In the United States, 154 IPOs were recorded in 2023, representing a 15% decline from 2022 and a significant 85% drop from the all-time high in 2021. In the Asia-Pacific region, the number of IPOs also declined by 18%, with 732 newly listed companies, while the EMEIA region showed signs of recovery with a 7% increase in volume. However, in the eurozone, the number of large IPOs fell sharply, with only 17 offerings exceeding 100 million euros, compared to 21 in 2022 and 161 in 2021.
Several companies went public in 2023 but got off to a rocky start, such as Kenvue in the healthcare sector, whose stock price has fallen by more than 20% since its IPO, and Instacart in the delivery sector, down more than 12% since its IPO.
However, some of these companies have seen their value rise since their IPOs. For example, Arm Holdings, a semiconductor company, has risen by more than 28%, and Birkenstock, a shoe manufacturer, has seen its value increase by more than 26%.
 

What factors could support IPOs in 2024?
 

In recent years, global monetary policies have had a significant impact on initial public offerings (IPOs). Rapid increases in interest rates in most developed economies have led to a decline in the number of IPOs.
 

However, as inflation slows, investors and analysts believe that interest rates have peaked—or are nearing their peak—and may even begin to decline. This situation could encourage companies to consider initial public offerings, thereby offering investors potentially more stable returns.
 

Furthermore, if interest rates stabilize, investors may turn to the stock market in search of higher returns, making fixed-income investments less attractive. Stabilizing interest rates could also signal a more stable and predictable economic environment, which would benefit companies planning for growth. Finally, planned spin-offs by major companies such as Vivendi, Sanofi, and Bayer could support IPOs in 2024.
 

Which IPOs should you watch in 2024, and how can you benefit from them?
 

Here are some of the potential IPOs in 2024 to watch: Reddit, Klarna, Stripe, Shein, Ola Electric, Databricks, Rubik, Circle, Skims, Discord, Plaid, and others.
 

To participate in an initial public offering (IPO), it’s important to check whether your financial institution (bank or online broker) offers IPO subscriptions. If not, you can wait until the company’s shares become available on the secondary market.
Regardless of your approach, it is essential to review the documents related to the company and its IPO to understand its industry, its strengths, the reasons behind its decision to go public, and its growth plan after raising funds.