The findings of our latest special report, Going Public: Evolving Investor Expectations for New Issuers, uncovers institutional investor perceptions on the IPO and SPAC markets, as well as examines the factors that influence investors’ willingness to invest.   

Over the last twelve months, the market has seen record IPO and SPAC activity and widespread excitement for new listings. According to Ted McHugh, Edelman’s Head of Investor Relations, “while many have questioned the longevity of this surge, our data shows that investors remain engaged and have a strong appetite for new issuers – particularly those in the financial and technology sector. However, as institutional demand moderates over time, new issuers will have to work harder to sell their investment story to ensure a successful transaction and achieve a premium valuation. As companies look to go public, they must continue to emphasize their long-term growth prospects, brand positioning, and the credibility of their board.”  

Among the key findings of this research:  

IPO/SPAC BOOM IS EXPECTED TO MODERATE 

Nine in ten institutional investors say the IPO and SPAC surge will end within the next year. At the same time, investor appetite for new issuers remains strong, with eighty-eight percent of investors likely and thirty-eight percent very likely to invest in IPO, SPAC or a newly public company in the next year.  

SPACS ARE GAINING TRACTION BUT INVESTORS WANT ADDITIONAL REGULATION  

Eighty-eight percent of investors agree that the investment profiles of companies that are going public through SPAC transactions has improved over the last one to two years. However, ninety-one percent of investors say the investment profiles of companies going public via IPO are stronger than those going public via SPAC. Additionally, 85% of investors say the SPAC industry requires additional regulation from the SEC.   

FINTECH AND TECH ARE GENERATING THE MOST INVESTOR INTEREST 

Investors selected financials, followed by tech as the top sectors their firm is the most interested in investing via an IPO or SPAC.  

INVESTORS WANT FINANCIAL GUIDANCE 

Fifty-two percent of investors say annual guidance is the preferred metric for a newly public company to provide guidance for, ranking higher than quarterly guidance at thirty-two percent and long-term at sixteen percent.  

CORPORATE GOVERNANCE IMPACTS INVESTORS’ WILLINGNESS TO INVEST  

Eighty-one percent of investors say the credibility/quality of the board has a positive impact on their willingness to invest in a company going public. 

ESG CAN’T BE PUT ON THE BACKBURNER  

Ninety percent of investors expect a company to have a clearly defined ESG strategy within its first year of being a public company. 

Contact Edelman to learn more about the report, as well as to hear about upcoming financial communications reports and events.