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An IPO blitz

Fully Charged
Bloomberg

Hi there, it's Tae from the Bloomberg Opinion team. The market for technology initial public offerings is sizzling again. This month is on track to set an all-time record for money raised in IPOs in the U.S., capping off an already record year, according to Bloomberg data.  

The coming days are set to be an IPO blitz: Both food delivery leader DoorDash Inc. and online home rental giant Airbnb Inc. recently increased their IPO price ranges ahead of imminent listings. On Tuesday, DoorDash priced its offering at $102 per share, putting the company on track to be the third-largest U.S. offering this year. DoorDash is slated to start trading on Wednesday, followed by Airbnb on Thursday. 

Investors can also soon look forward to the public market debuts of virtual-world gaming platform Roblox Corp., online loan company Affirm Holdings Inc. and ContextLogic Inc., the parent of e-commerce app Wish—all companies with private market valuations in the billions of dollars. 

One obvious reason for the current rush is that recent tech IPOs have done well. The poster child of that success is data cloud software company Snowflake Inc. Snowflake's investors, including the likes of Warren Buffett's Berkshire Hathaway Inc., have seen their shares more than triple in value since the company's September listing. And it's not just Snowflake. The Renaissance IPO Index, which tracks newly public companies, has more than doubled this year.

This is not an aberration. Historically, the growth scarcity of difficult economic environments has benefited growth-oriented technology stocks. And many tech companies have seen an extra boost during the pandemic, which led to an acceleration of long-simmering technology trends, from cloud software to food delivery to video games.

But for every tech unicorn now riding the work-from-home wave to the public markets, there's a question: What happens after the pandemic?

DoorDash, Roblox and Airbnb all seem to have good answers. DoorDash has vaulted ahead to become the No. 1 player in U.S. food delivery, and is expanding into the local commerce market as it flirts with profitabilty. Roblox's stunning success in the gaming category for young children bodes well for its ambitions to be the platform for virtual worlds, even after schools reopen. And finally, Airbnb has shown a nimble resilience under extreme circumstances, indicating it still has what it takes to be a travel industry leader once restrictions lift. 

Meanwhile, the prospectuses for Wish and Affirm don't have as many signs that they'll keep surging post-coronavirus. For Wish, which enables Chinese merchants to sell their cheap wares around the world, sales growth sputtered from 67% to 33% in its most recent quarter over the previous year, even under lockdowns. And Affirm, which provides installment loans to online shoppers, revealed that nearly 30% of its revenue comes from one customer: Peloton Interactive Inc. After riding high on gym closures, Peloton's shares recently dropped on the news of promising vaccine developments. 

So, yes, the current IPO boom looks set to last for a while. And many people will never go back to their less-tech-enabled existences before the global lockdowns. But the sensible investor should still carefully sift through the latest offerings. As hard as it is to imagine, the pandemic won't be around forever. Tae Kim

If you read one thing

Cybersecurity firm FireEye said it had been hacked by a "nation with top-tier offensive capabilities," and that the attackers stole sensitive tools it uses to test customers' networks. 

And here's what you need to know in global technology news

Apple has launched its first over-ear headphones, which will cost $550 and go on sale Tuesday. (Don't expect them to arrive in time for Christmas.)

A day after it sold its self-driving division to Aurora, Uber is selling is flying taxi unit to Joby Aviation. The company is shedding its utopian side-projects as it aims to turn a quarterly adjusted profit by the end of next year. 

Apple is shifting the leadership of its self-driving car unit to its AI chief. 

Microsoft said the game Halo Infinite won't be coming out until next fall.

The competition is coming for Robinhood. China-owned brokerage Webull says it's pulling away thousands of traders from Robinhood, the more established free stock-trading app. Webull has increased its brokerage accounts tenfold this year to about 2 million, and has plans to raise money from U.S. investors.  

 

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