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The 2023 IPO scene: Biggest hits and misses

The 2023 IPO scene: Biggest hits and misses

After navigating treacherous waters in the preceding year, the US initial public offering (IPO) market embarked on a path of recovery in 2023, signaling the inception of a new upcycle. 

As we delve into the highs and lows, this article casts a spotlight on the most and least successful IPO deals that defined the landscape of 2023.

Successful IPOs

Despite facing headwinds from rate hikes, bank failures, and global geopolitical uncertainties, the IPO market saw a notable resurgence with 107 debuts collectively amassing $19.4 billion. Though shy of historical highs, the rebound reflects improving conditions. 

Based on deal size, the biggest IPO of 2023 was the one by Arm Holdings (NASDAQ: ARM), a SoftBank-owned chipmaker.

Based in the UK, the company made its debut on September 14 at the IPO price of $51, for a valuation of $54.5 billion. 

Although it faced a bumpy few weeks following the debut, ARM’s price recently staged a recovery, sitting at $72.29 at the time of writing on December 25. At this level, the stock is up more than 41% compared to its IPO price.

This year’s top 10 IPOs by deal size. Source: Stock Analysis

Another name that captured significant investor attention is Nextracker (NASDAQ: NXT). This California-based company that provides intelligent solar tracker solutions debuted on the Nasdaq stock exchange on February 9, at the IPO price of $24. At the time, the company was valued at $3.5 billion.

In the following few months, NXT embarked on a sharp uptrend, seeing its IPO price more than double. At the time of writing, the stock was sitting at $49.25, up 105.2% since its debut.

Meanwhile, other noteworthy names that saw successful returns since their debuts are mostly smaller companies such as Oddity Tech (NASDAQ: ODD), CAVA Group (NYSE: CAVA), and RayzeBio (NASDAQ: RYZB), among others.

IPOs with negative returns

One of the biggest IPOs of 2023 was the listing of Instacart (NASDAQ: CART), an American company also known as Maplebear.

A few days after ARM’s first trading day, Instacart debuted at the IPO price of $30, giving it a valuation of roughly $10 billion. With a deal size of about $660 million, it is the fourth-biggest IPO of this year, according to Stock Analysis.

At press time, CART was standing at $23.78, down over 20% from its IPO price. Despite beating analysts’ estimates, Instacart’s shares fell after its first earnings report as a publicly traded company, mainly because solid results were not enough to persuade investors that the stock deserved to trade at a premium. 

Biotech firm Acelyrin (NASDAQ: SLRN) is also among the companies that witnessed a stark decline in their IPO prices. Raising roughly $540 million in May, the stock fell over 60% from its debut price of $18.

However, overall, 2023 is seen as a positive year for the IPO landscape. 30 listings raised $100 million or more, while three IPOs had a deal size of more than $1 billion. In general, the group of $100+ million IPOs performed well, averaging a solid 19% return, according to Renassaince Capital

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Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.

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