Globally, initial public offerings (IPOs) garnered a record $594 billion in 2021, riding the coattails of stock market booms, but frequently disappointed investors with their future stock performance.

Companies ranging from technological start-ups to blank-check acquisition firms crowded the market with offerings, capitalizing on investors’ propensity to put speculative bets as cheap interest rates and the re-opening of economies as a result of Covid-19 vaccinations fueled their desire for risk.

“When you put that in the context of fresh issuance activity, and especially the emergence of new public companies,” said Andrew Wetenhall, co-head of equity capital markets in the Americas at Morgan Stanley.

Some of those bets paid off. Those who invested in the $1.2 billion IPO of loan start-up Affirm Holdings, sponsored by PayPal, in January had more than quadrupled their money, compared to a 25% return on the S&P 500.

However, many IPOs failed. Shares of Swedish vegan milk company Oatly Group, which raised $1.4 billion in its New York IPO in May, are down 53%, while shares of British food delivery service Deliveroo, which raised 1.5 billion pounds ($2.1 billion) when it listed in London in March, are down 46%.

The Renaissance IPO index, which monitors the average performance of newly listed US IPOs, is down around 8% for the year, while the S&P 500 index is up 25%.

Some bankers warned that shares of some of the firms that went public in 2021 are still trading at historically high prices, even if they fell following the IPO. This is due to the fact that many investors were prepared to spend top dollar to participate in these firms during private fundraising rounds prior to their IPOs.

“The issue is that buyers of these IPOs, as well as after-market purchases, are registering losses,” said Paul Abrahimzadeh, co-head of Citigroup’s North America equities capital markets.

According to data source Refinitiv, a total of 2,097 IPOs, excluding those of special purpose acquisition companies (SPACs), raised $402 billion globally in 2021. This represents an 81% increase in proceeds and a 51% increase in the number of IPOs since 2020.

According to data provider Dealogic, IPO proceeds in 2021 totaled $594 billion, including SPACs, which are shell businesses that normally emerge when they have lined up investors.

Technology and health care were the two most important areas boosting IPO numbers. According to Refinitiv, 426 technology IPOs and 332 healthcare-related transactions were launched this year, accounting for over 42% of IPO proceeds obtained by firms globally.

Rivian Automotive, an electric-vehicle manufacturer, raised more than $12 billion in its market debut in November, making it the largest US IPO since Alibaba Group in 2014.

Other notables were Chinese online video provider Kuaishou Technology, which raised $5.4 billion, and Korean e-commerce behemoth Coupang, which raised $4.6 billion.

“It has been an incredible year for global equity formation – one that I believe will not be duplicated anytime soon,” said James Fleming, global co-head of equity capital markets at Citigroup Inc.

According to Refinitiv, SPACs, which largely went public in New York, raised around $160 billion this year, accounting for 28% of total funds raised by US IPOs.

They experienced a roller-coaster ride as investor enthusiasm for them at the start of the year evolved to despair due to low results.

After peaking in February, the flagship SPAC exchange-traded fund, the Defiance Next Gen SPAC Derived ETF, has lost 25% of its value year to date.

“The high rate of [SPACs] activity could never be sustained, and the market is already consolidating.” SPACs, on the other hand, are here to stay, according to Eddie Molloy, co-head of equity capital markets in the Americas at Morgan Stanley.

The IPO pipeline for the first quarter of 2022 is robust, with social media platform Reddit, transportation tech startup Via, software manufacturer Cohesity, and private equity firm TPG all filing to go public.

Nonetheless, investment bankers believe that the recent lackluster financial performance of many IPOs implies that this year’s windfall is unlikely to be duplicated in 2022, particularly if stock markets lose speed due to inflation and other economic issues.

There is also the potential of regulatory repercussions. The US Securities and Exchange Commission has pushed down on Chinese corporations’ New York listings, requiring additional disclosures. Didi Global, which completed its $4.4 billion IPO in New York in June, has announced that it will relocate its listing to Hong Kong, as China encourages many of its firms to go public closer to home.

“I have to believe [2022] will be a low year in terms of global issuance levels,” Mr Fleming said.