The end of 2013 marks the best year for initial public offerings since 2000 as the stock market reached new heights amid an improving economy, leaving the coast clear for more companies to go public in 2014.
This year, 222 companies went public and raised approximately $55 billion, according to a report from stock market research firm Renaissance Capital. It's the first time since the recession began that the stock market tallied more than 200 IPOs, after 214 companies went public in 2007. The previous high for IPOs occurred during the 2000 tech bubble when 406 companies went public, according to Renaissance. Some tech companies that went public during the 2000 bubble overvalued their stock and others, including Pets.com, went out of business. Despite concerns that stocks are once again overpriced, Renaissance said "valuations were disciplined" during 2013 for many types of companies.
"While health care, technology and consumer produced many of the year's biggest hits, the increase in IPO activity was broad-based," the report said. "With a building backlog of IPOs and economic indicators continuing to show signs of improvement, we anticipate another dynamic year for the U.S. IPO market in 2014."
Twitter made perhaps the most publicized stock market debut of the year in November on the New York Stock Exchange, but other consumer companies, including Potbelly and Noodles & Co., also had profitable IPOs during 2013. In December, Hilton had the largest IPO for a hotel in history, and even the realty trust that owns the Empire State Building went public in October.
Looking ahead to 2014, a slew of tech companies appear to be ready for their chances to profit on Wall Street. Square CEO Jack Dorsey may take his mobile payments company public in early 2014 to follow the successful initial public offering of Twitter, the company he co-founded. China-based Alibaba which allows manufacturers and consumers to buy and sell anything using its global online marketplace, is also poised to become a publicly traded company during 2014 in a deal that would mean huge profits for early stage investor Yahoo!. The growing demand for cloud-computing technology also creates a good environment for the expected IPOs of cloud-storage companies Box and Dropbox.
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