ANALYSIS: Investors Made a Mad Dash to IPOs, SPACs in 2020

The initial public offering market turned in incredible results in 2020. The Federal Reserve’s efforts to support the economy by moving interest rates to near zero, likely keeping rates very low for a long time, and initiating a massive bond–buying program, stabilized markets and kept them working. An unintended consequence, however, was a mad rush into the IPO market, propelling it to record results. The year saw over $170 billion in total capital raised, exceeding the prior top year of 2007 by more than $63 billion.

The current frenzy in equities has the qualities of a market bubble, ...