Tech
Is The IPO Market Broken?
2020 was a record year in the IPO market as companies sought to capitalize on a red hot market and the euphoria of young retail investors. But the market is changing. SPACs, which used to be seen as highly speculative are now raking in billions, almost to the levels of traditional IPOs while a new direct listing rule from the SEC could upend the status quo. So is the IPO market broken and is it really the end of the traditional IPO as some suggest? Watch the video for more.
The 2021 IPO market is already on fire six weeks into the new year, with SPACs leading the way.
SPACs have raised more than $38 billion year to date, with an average of $296 million for 128 SPAC IPOs, according to SPACInsider. That’s nearly half the money raised by SPACs in 2020. Last year, SPACs hauled in a record $83 billion with an average of nearly $335 million for 248 listings.
This year’s numbers dwarf those in previous years. In 2019, only $13.6 billion were raised through SPACs. In 2018 and 2017, they collected $10.7 billion and $10 billion, respectively.
The big question this year is how a change to the New York Stock Exchange’s direct listing rules will impact the IPO market.
The new rule, which was approved by the Securities and Exchange Commission in late December, will allow companies to raise fresh capital through direct listings as opposed to just selling existing shares. Under the change, companies can raise cash from retail investors as well as by selling existing shares of the company. Making direct listings more attractive could cut demand for a SPAC or traditional initial public offerings.
“Everyone’s on a level playing field,” NYSE President Stacey Cunningham told CNBC when talking about the new rule. “What’s great about it is it democratizes access to that public listing on the exchange on that first day of trading.”
Online gaming company Roblox may be one of the first to take advantage of the new rule in February. The company filed for a traditional IPO in December but delayed its debut after Airbnb and DoorDash posted massive first-day pops. This trend has some analysts saying the IPO pricing market is broken.
Digital currency exchange Coinbase announced plans to go the direct listing route at the end of January, and software companies UiPath and DataBricks are expected to take that route as well after massive funding rounds.
Watch the video above to learn more about the IPO and SPAC processes and whether the IPO market is really broken.
0:00 — Intro
1:55 — Traditional IPO Process
7:28 — Results for VIPs
9:46 — IPO alternatives
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Is The IPO Market Broken?7:28
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Unstoppable demand for AI is leading to a capacity crunch on factory lines at the world’s leading chip manufacturer, Taiwan Semiconductor. And it could put a chokehold on AI’s ability to scale. Analysts tell CNBC that Nvidia, Apple, Broadcom, AMD and others are locked in an “extremely fierce” competition to get their GPUs, CPUs and custom AI chips made at TSMC. Capacity can’t come online fast enough, despite TSMC’s rush to build new fabs in Taiwan, Japan and Arizona, where has expanded investment to $265 billion. The strain has made one man at TSMC “the most popular person on the planet,” as chip start-ups and big name CEOs visit Taiwan to ask him for wafer allocation. It’s also created a rich opportunity for Intel, as customers look to the long-struggling foundry arm of the U.S. chip manufacturer for a second source.
Chapters:
0:00 Introduction
2:06 ‘Most popular person on the planet’
6:54 Making room for smaller players
9:10 Can new U.S. fabs ease the crunch?
Producer and Reporter: Katie Tarasov
Edited by: Matt Soto, Andrew Evers
Camera: Eddie Temborski, Robert Lampe, Evan Reinhardt
Senior Director of Video: Jeniece Pettitt
Animation: Jason Reginato, Emily Park
Additional Footage: Cerebras, D-Matrix, Getty Images, Intel, Nvidia, OpenAI, SpaceX, TSMC
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Why There’s An ‘Extremely Fierce’ Battle For TSMC’s Limited Chip Manufacturing Capacity
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Warner Music Group, the third-largest music label by market share, is tapping into the South Asian music movement with its latest venture.
CNBC’s Laya Neelakandan explains.
source
Micron’s hometown of Boise, Idaho has a growing crop of newly minted millionaires.
The AI-driven memory boom is showing up in the form of job growth, new construction projects, a bustling dining scene and an influx in new residents.
CNBC’s Katie Tarasov explains. Find the full report in related video.
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Half of single Americans say they are going on fewer dates or choosing less expensive activities because of rising costs, according to BMO’s 2026 survey.
But, the cost of dating itself is only part of the story. For millions of users, finding a date means paying for the apps.
Watch the full story in related video.
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Billions of dollars have been raised for this year’s midterms elections, with a significant portion coming from big name tech billionaires in the cryptocurrency, artificial intelligence and online gambling sectors. Megadonors’ contributions are overwhelmingly behind Republicans in the 2026 midterm election, with 14 of the 20 largest donor groups exclusively or nearly exclusively backing GOP candidates or outside groups. CNBC’s Luke Fountain reports.
Chapters:
00:00 – 00:56 Introduction
00:57 – 03:37 Chapter 1 – Republican-aligned donors
03:38 – 05:07 Chapter 2 – Democrat-aligned donors
Reporter: Luke Fountain
Produced and Edited by: Romy Tarantino
Animation: Jason Reginato, Emily Park
Additional Camera: Macklin Fishman, Andrew Evers
Supervising Producer: Shawn Baldwin
Additional Footage: Getty Images
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About CNBC: From ‘Wall Street’ to ‘Main Street’ to award winning original documentaries and Reality TV series, CNBC has you covered. Experience special sneak peeks of your favorite shows, exclusive video and more.
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The Megadonors Funding The 2026 Midterms
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@HistoryRepeat
January 10, 2024 at 12:26 pm
Well.. the greedy underwriters don't do their due diligence and as a result, manipulated accounting practices are accepted… but hey, what do they care by the time investors lose money, they have made their money…
@chungkhoanphoco9354
January 10, 2024 at 12:26 pm
Very informative. Thanks a lot ^^
@tingyuliu3943
January 10, 2024 at 12:26 pm
Helpful, really helpful and comprehensive!
@downrightmike
January 10, 2024 at 12:26 pm
Please explain to me how the internet of things has impacted markets? I don't think you know what IoT is. Just a buzz word being used.
@karabothema1079
January 10, 2024 at 12:26 pm
Leave this kind of reporting to vox because you're bad at it.
@marcelorichard967
January 10, 2024 at 12:26 pm
Wow, amazing to see others who trade with Mrs shelly Anderson, I'm currently on my 5th trade with her and my portfolio has grown tremendously.
@cajunchampagne2469
January 10, 2024 at 12:26 pm
Shady.
Greedy.
Corrupt.
Working as intended though.
@oliverallen5324
January 10, 2024 at 12:26 pm
We live in a world of middle men. Crypto Currency, companies like Tesla which don't have dealerships, are trying to change that.
@amitbadoni5471
January 10, 2024 at 12:26 pm
Then what's the solution?
@whendoigettosayfuck
January 10, 2024 at 12:26 pm
Palantir are DORKS!!!!
@iRiShNFT
January 10, 2024 at 12:26 pm
How to prove yourself to be an idiot : Use the term "Going Forward" as if there are other options
@fixtureorbit1825
January 10, 2024 at 12:26 pm
The lamentable wall metabolically sprout because storm lately hover in a psychedelic surgeon. tested, roasted ceramic
@wiseGrant
January 10, 2024 at 12:26 pm
They always cry about this. The same banks underwrite SPACs and IPOs.
@THEETERNALANGELX
January 10, 2024 at 12:26 pm
should we just abolish IPO and go for direct listing instead? Does direct listing level the playing field for anybody (institutional or retail) wanting to buy the stock?
@loloanderson2130
January 10, 2024 at 12:26 pm
The good alloy unquestionably spray because arm phylogenetically surround below a rabid tornado. quickest, afraid dime
@jonathanbrotto7278
January 10, 2024 at 12:26 pm
First come first profit.
@joaopaulotargaryen7368
January 10, 2024 at 12:26 pm
No. move on
@ThePowerofJames
January 10, 2024 at 12:26 pm
Meanwhile, a redditor gets investigated for liking a stock, and disagreeing with the hedge funds analysis.
@andrewilliams7949
January 10, 2024 at 12:26 pm
The sassy lobster metabolically confess because venezuelan methodically wink toward a dark fahrenheit. unwritten, giant price
@hugonongbri8100
January 10, 2024 at 12:26 pm
IS WATER WET ??
@Jon-et5uu
January 10, 2024 at 12:26 pm
Yes, because the people are broken
@unrest99
January 10, 2024 at 12:26 pm
I tried 2 time IPO offering, both opportunities missed.
@williamjones177
January 10, 2024 at 12:26 pm
Get the hell off my cell phone
@SourSensei
January 10, 2024 at 12:26 pm
Before I watch I want to put my 2cents in…yes it starting to but it not a bad thing or is it 🤷🏾♂️ my generation is doing the best we can with what the last 3 wouldn’t didn’t past down
@hassansaid13
January 10, 2024 at 12:26 pm
BFCH is another bitcoin mining company stock that will gain 1500% by june at the very least. the thing is it only trades during market hours 9.30 to 4pm et. its moving exactyly like Riot and Mara. Riot was 0.42 cents. 7 Months ago now its trading at above $50. and its only getting started. BFCH is only 0.25 cent a share
@edmondfosidick1736
January 10, 2024 at 12:26 pm
Don't stock your money in the bank, buy crypto-currency and investment in proficient trading company like am always doing, and be rest assured of good profit always fit for a very long time.
@theasdguy
January 10, 2024 at 12:26 pm
I wonder how many of them are good investments. I don't really know. I"m sure some are.
@seans9149
January 10, 2024 at 12:26 pm
Welcome to 1st class and 4th class. They wrote the laws for themself. Retail investors are they small fishes and 4th class. The Retail investors will be huge in 2021-2022; imagine if the retail investors could be part of the IPO’s start and how much bigger these companies will grow.
@helenp9085
January 10, 2024 at 12:26 pm
nice video, I was able to build a big income stream during the covid-19 pandemic investing with a professional broker, Mrs Esther Lawrence.
@InvestingwithKurt
January 10, 2024 at 12:26 pm
Not sure, but the market for sure is rigged LOL I feel like we live in an episode of Billions