Despite the correction this month, technology shares have gone gangbusters in 2020.
The index most symbolic of the digital world, the Nasdaq Composite (NASDAQ: .IXIC), has still gained 17% this year and 56% since the COVID-19 crash in March.
And private tech companies have taken notice, announcing plans to float while the sentiment is positive.
On Friday Australian time, it’s still 89% up on its initial public offer (IPO) price of US$120.
The Motley Fool spoke to Stake founder and chief executive, Matt Leibowitz, about five more US tech companies that are about to undergo an IPO.
This is the brand most familiar to Australians, and no doubt many would already be customers.
Speculation has been rife for a couple of years about Airbnb going public. It’s an iconic internet startup that contributed to the creation of the term “unicorn”.
The accommodation platform reportedly planned to float in March. But then COVID-19 struck and killed off the entire travel sector.
Now there are reports that it had confidentially filed IPO paperwork with the US corporate regulator in August.
While it’s dawdled, the company’s valuation has gone from US$31 billion in 2017 to US$18 billion when it raised private funds in April.
Leibowitz isn’t so sure that the IPO will happen this year.
“It may get pushed back,” he told The Motley Fool.
“A lot of these businesses are loss-making, so it’s really just about biding their time until they list.”
The still COVID-depressed travel sector meant that, despite its famous name, the company has some work to do before going public.
“Where they are right now as a business, they’re going to have to redo a bit of trust in terms of making it look more exciting.”
This is another brand that Australians would recognise. DoorDash started to deliver food in the country late last year after running for six years in North America.
There have been reports the company plans to float in the final quarter of this year.
Leibowitz said it’s hard to judge DoorDash’s merit as it hadn’t yet publicly revealed its finances.
“We’ve seen them grow pretty quickly in Australia,” he said.
“These guys are moving ahead quicker than Airbnb are… Home delivery of food is massive.”
With companies like DoorDash that are in very competitive markets, Leibowitz said the moat isn’t always clear.
Entrepreneur, Peter Thiel, has become infamous in recent years as a Donald Trump supporter. But in the late 1990s, he co-founded Paypal Holdings Inc (NASDAQ: PYPL) along with Tesla Inc (NASDAQ: TSLA) boss Elon Musk.
Palantir is a big data analytics company Thiel co-founded in 2003. Its debut on the market is scheduled for Wednesday night (30 September) Australian time.
Because its clientele is defence and intelligence agencies, there is a certain amount of mystery behind its products and how they work.
“The CIA was one of the earliest investors in Palantir… The CIA has made an absolute fortune,” said Leibowitz.
“This is going to be a very, very interesting IPO.”
As a direct listing, there is no fixed share price to start with and the market demand will determine it.
The Wall Street Journal’s sources have reported an estimate of around US$10 a share, which would give it a market valuation of almost US$22 billion.
Wish is a discount e-commerce site, which Australians might pejoratively call a “$2 shop”.
The online store doesn’t operate in Australia. But the name might be most familiar to local basketball fans as the jersey sponsor of the Los Angeles Lakers.
The company filed IPO papers at the end of August.
“Shopping company with aggressive marketing, very popular in the US… They’re looking at a valuation between US$6 to US$8 billion,” Leibowitz said.
“I think their valuation is actually higher than what they’re listing at.”
Asana produces software that helps corporate teams manage their work.
Like Palantir, it has a good pedigree — Facebook, Inc (NASDAQ: FB) co-founder Dustin Moskovitz co-founded Asana in 2008.
And also like Palantir, it will first appear on the market Wednesday night (30 September) Australian time.
“It sort of competes with Australia’s Atlassian Corporation PLC (NASDAQ: TEAM),” said Leibowitz.
“You’d know about it if you worked in tech-based businesses where they need project management.”
The Motley Fool US reports Asana counts 30% of the Fortune 500 as clients, and that for the quarter ending June, it posted a 57% year-on-year revenue increase.
“I’m impressed with all that this company has going for it and will be starting a position once shares become available to the public,” reported The Motley Fool US’ Brian Withers.
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