The IPO SPAC-Tacle

Exchanges

Goldman Sachs

Business

4.3 • 1.1K Ratings

🗓️ 2 February 2021

⏱️ 29 minutes

🔗️ Recording | iTunes | RSS

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Summary

With the strength of the IPO market and the surge in IPOs via SPACs continuing into 2021, host Allison Nathan, creator and editor of the firm’s Top of Mind report, asks experts whether or not these trends are sustainable. She speaks with Goldman Sachs’ head of Global Equity Capital Markets, David Ludwig, Professor of Finance at the University of Florida, Jay Ritter, and Professor of Business and Law at Stanford Law School, Michael Klausner. A note to subscribers of the Top of Mind at Goldman Sachs podcast: going forward, we will be publishing future episodes as Exchanges at Goldman Sachs so please be sure to subscribe to that feed. Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	This is exchanges at Goldman Sachs, where we discuss developments currently shaping markets,
0:13.4	industries, and the global economy.
0:16.1	I'm Alison Nathan from Goldman Sachs research, creator and editor of the firm's Top of Mind report, which
0:22.5	focuses on macroeconomic issues on the minds of our clients. And I'm excited to be bringing
0:28.1	the Top of Mind at Goldman Sachs podcast to listeners of exchanges. Going forward for all of those
0:34.5	loyal subscribers to the Top of Mind feed, we'll be publishing the podcast
0:38.6	about once a month as part of the exchanges feed. So please be sure to subscribe.
0:44.4	In this episode, we're focusing on a topic we think will resonate with listeners of both
0:49.1	podcasts, the state of the IPO market. Amid the economic and market roller coaster of 2020, the IPO market
0:57.5	stood out, slamming shut in the first part of the year as pandemic uncertainty set in, only to
1:03.7	open up with gusto in the second half of 2020, even as risks around the virus and its economic impact
1:10.7	remained high.
1:12.3	The result was more than $300 billion of global IPO issuance,
1:17.8	including record-breaking issuance of $170 billion in the U.S.
1:22.6	These figures were all the more notable given the tepid IPO market only a couple of years ago.
1:29.2	Companies were staying private for longer, aided by a surge in the availability of venture capital and private equity capital.
1:36.3	In 2019, the number of U.S. publicly traded companies was at one of its lowest levels in two decades.
1:43.8	This renewed focus on public markets has raised
1:47.0	the question of whether the era of staying private for longer is truly behind us, especially as
1:53.1	companies are increasingly receiving higher public valuations. Indeed, those lofty valuations
1:59.6	have even begun to raise concerns of a bubble in public markets.
2:03.6	In adding to bubble concerns is the other exceptional feature of the recent IPO surge, the high number of special purpose acquisition companies, better known as SPACs or blank check companies, which are publicly held investment vehicles created to merge with a private company, thereby bringing the company public.
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