Why the IPO market is exploding in a frenzy that rivals even the 1999 euphoria

• Initial public offering euphoria is upon us. It’s been a record-setting year for public listings as well as how investors are receiving them.
• IPOs got off to a cold start in 2020, but have bounced back with a vengeance, notching record volumes.
• They’re also seeing massive pricing pops. The average first-day return on IPOs in 2020 is at its highest level since the dotcom-bubble. 
• The exuberance for public offerings from the likes of DoorDash and Airbnb has been fueled by a variety of factors, including the rise of Robinhood day traders, momentum hunters, and a smaller allotment of shares for investors to fight over. 

It’s not just you – the IPO market really is partying like it’s 1999. 

Not since the days of Y2K, GeoCities, and eToys.com have initial public offerings garnered such unbridled enthusiasm from investors.

When DoorDash and Airbnb went public this week, their stock prices shot up on the first day of trading, soaring 86% and 113%, respectively. The average IPO this year has enjoyed a 41% first-day return, according to data compiled by University of Florida professor and IPO expert Jay Ritter – the highest mark since 2000, when IPOs jumped 56% on average amid the dotcom bubble.