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This year has already been a record one for IPO volume, and by all accounts the final quarter of 2021 is set to continue that momentum with anticipated Wall Street debuts from big venture-backed companies including , and鈥攖he largest expected offering of the year鈥攅lectric-truck maker .

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Fourteen companies went public last week in the U.S., according to IPOScoop, with and among the notable public debuts for tech companies.聽

Based on the last month鈥檚 momentum, the fourth quarter is expected to be strong, according to , a senior analyst at the IPO research firm .

鈥淲e expected the fourth quarter to be busy,鈥� Kennedy said. 鈥淚 think it鈥檚 going to come out at the high end of our expectations based on October鈥檚 pricings. I鈥檇 say it鈥檚 still a discerning market. Looking at last week, we did have a few deals trade down, a couple deals postpone.鈥澛�

Calibrating expectations

Last month, direct-to-consumer wine startup and connected fitness company 聽both postponed their respective IPOs. Clothing rental company Rent the Runway, meanwhile, closed its first day of trading below its IPO price.

But that鈥檚 not necessarily a red flag for the IPO market. Rather, investors are pushing back on high valuations, and with so many deals happening, they haven鈥檛 had as much time to devote to each IPO, according to Kennedy.聽

The IPO postponements also haven鈥檛 been widespread. They鈥檝e largely affected 鈥渟econd and third tier鈥� companies, according to , founder of which offers financial services related to new listings.聽

A company is more likely to postpone its offering if it鈥檚 not getting the valuation it wants from IPO investors, or if it could raise money from private investors and go public at a later date, according to Schuster.聽

There has also been a lot of volatility for individual stocks so far this year, and that could be a factor in postponing an IPO.

鈥淭here鈥檚 a lot of adjustments going on under the hood, and that affects more second- to third-tier companies; that鈥檚 why you see some deals getting pulled because there鈥檚 not much investor demand,鈥� Schuster said.

Indeed, it鈥檚 not really the buzzy software companies that have postponed their IPOs.

In the pipeline

But the rest of the quarter is expected to be very active for new IPOs, with the usual exception of holiday weeks.

The process of going public from filing to trading has sped up in recent years, and that means a company that files its S-1 registration statement as late as the end of November could still start trading before the year is over, according to Kennedy.聽

Companies that have recently filed S-1s include digital banking platform , which filed to list in the U.S. and Brazil, and electric-car maker , which is expected to be the largest IPO of the year.

Companies that could go public before 2022 include:

• Rivian (expected to start trading next week);
• (expected to start trading next week);
• (expected to start trading Thursday);
• ; and
• Nu.

Record IPO volume

This year has already been a record year in terms of IPO volume. Companies have raised more than $165 billion so far this year in IPO proceeds, more than double the amount of last year鈥檚 IPO proceeds of $81 billion, according to Renaissance Capital.

鈥淭here are companies realizing there鈥檚 really a window of opportunity here to raise money. Equity markets in general, the macro environment is really strong,鈥� Schuster said.

Inflation concerns are subsiding and risk appetite is strong on both the pre- and post-IPO side, according to Schuster. The strong equity market in general is driving the big risk appetite for stocks, with the S&P outperforming small cap and big cap indexes, Schuster noted. Big moves in the 30-year bond market and lower yields also contribute to the overall environment.

This record IPO year has been in the works for years, Kennedy said. With more companies staying private longer, the general IPO pipeline was building up for some time. Last year could have been the standout year, but the pandemic threw a wrench in those plans.

鈥�2021 has been years in the making in terms of volume,鈥� Kennedy said.

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