Wall Street banks amass USD 650 million in fees during U.S. IPO surge

By Nikita Chaurasia  | Date: 2021-07-05

Wall Street banks amass USD 650 million in fees during U.S. IPO surge

Wall Street banks have reportedly witnessed the busiest week in 17 years with several companies such as Krispy Kreme Inc. and China-based Didi Chuxing Technology Co. managing to raise hefty sums during their initial public offering recently.

Notably, Israeli cybersecurity company SentinelOne, Turkish e-commerce platform D-Market Electronic Service & Trading, and several drug developers also took part in the massive IPO week.

At least 14 companies have raised over USD 100 million in offerings on the NYSE (New York Stock Exchange) and Nasdaq, marking the most attractive stretch for new entrants since 2004.

Market experts cite that the momentum of these public offerings accentuates the demand for growth. The recent developments bring stark recognition to the fact that IPOs are still the favored route to market despite the rise in prevalence of direct listings, which are known to have no underwriters as well as much lower advisory fees.

Altogether, the underwriters have earned approximately USD 400 million in fees for assisting with the IPOs and are expected to record an additional USD 259 million in paper gains, assuming they exercise their options to purchase allotted shares at the IPO discount.

The underwriting fees for last week’s IPOs ranged from 7% for small deals from companies such as Aerovate Therapeutics, and CVRx to just 2% of the total amount raised in case of ride-hailing company Didi’s enormous financing.

Morgan Stanley and Goldman Sachs served as lead managers for the IPOs of Didi, and SentinelOne, reeling in the highest fee revenues from the two biggest offerings of the week.

Apart from advisory fees, underwriting banks have also earned from IPOs by receiving options to buy a stock at the offer price so they can reap profits from the pop that typically follows.

IPOs remain a highly lucrative business opportunity for Wall Street, and there seems to be no slowdown in sight, sources claimed.

Source Link –

https://www.cnbc.com/2021/07/04/banks-earn-650-million-in-fees-and-stock-gains-from-ipo-flurry.html

 

 

About Author

Nikita Chaurasia     aeresearch.net

Nikita Chaurasia

An accomplished professional in the field of content development, playing with words comes naturally to Nikita Chaurasia. After completing her post-graduate MBA degree in Advertising and PR, Nikita worked across numerous content-driven verticals, undertaking diverse r...

Read More >>

More News By Nikita Chaurasia

Pacific Island pushes Japan to delay wastewater release from Fukushima

Pacific Island pushes Japan to delay wastewater release from Fukushima

By Nikita Chaurasia

Pacific Island nations have reportedly pushed Japan to postpone the release of Fukushima nuclear power plant wastewater due to concerns that it may pollute fishing grounds. An appeal was made on Wednesday when Japan announced that treated sewage f...

Activist groups take Danone to court over excessive use of plastics

Activist groups take Danone to court over excessive use of plastics

By Nikita Chaurasia

Danone, the French bottled water and yogurt firm, is reportedly being sued in court by three environmental activists’ groups for failing to cut its plastic footprint significantly. According to the groups, the maker of Evian and Volvic miner...

Bosch expands security with dashcams designed for rideshare drivers

Bosch expands security with dashcams designed for rideshare drivers

By Nikita Chaurasia

Bosch, the German technology company, has reportedly expanded its security footprint in the ridesharing market with the launch of its latest security dashcams. At CES 2023, Las Vegas, the German tech firm unveiled a new integrated smart camera on ...

Australia: PM Albanese denies potential $450M payout to Rio Tinto

Australia: PM Albanese denies potential $450M payout to Rio Tinto

By Nikita Chaurasia

Australia's Prime Minister Anthony Albanese has reportedly denied rumors that Rio Tinto and its partners could receive a $450 million settlement for the Gladstone power station, which would bring the total compensation for the coal price limit to...

UK: Firms still struggle with post-Brexit trading and red tape

UK: Firms still struggle with post-Brexit trading and red tape

By Nikita Chaurasia

Businesses in the UK are still reportedly grappling after two years following the beginning of post-Brexit trading, as suggested by a new report. According to the British Chambers of Commerce (BCC), firms are still battling increased red tape and ...