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On the Radar

Initial Public Offerings

September 2021
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On the Radar
Initial Public Offerings

The past 12 months have been marked by the highest level of initial public offerings (IPOs) in recent history. In a “traditional” IPO, a private company becomes public by selling its equity in a formal underwritten offering. Although such an offering has historically been the most common way to raise public capital, 2020 was a record-breaking year for special-purpose acquisition companies (SPACs) and this trend has continued in 2021. Many private operating companies have continued to merge with SPACs to raise capital rather than undertaking traditional IPOs or using other financing alternatives. Direct listings have also become more frequent. Companies can also go public by registering debt securities, distributing shares in a spin-off transaction, or registering securities issued by real estate investment trusts (REITs).