• Software companies with US IPOs were popular targets for eToro users’ cash
  • Palantir Technologies, Snowflake, Unity Software and Sumo Logic popular IPOs
  • Airbnb and Ant Financial IPOs are eagerly awaited by investors

Investors climbed aboard the IPO train for software companies in September and bought shares in a clutch of companies listing on US stock markets for the first time.

All eight of the top IPOs that attracted the most investor cash in the September quarter were software companies, according to data from trading platform eToro.

“2020 saw a slow start for IPOs with only a handful of public listings announced from the likes of Warner Music Group and Royalty Pharma,” said eToro market analyst, Josh Gilbert.

“This all changed in Q3, when a flurry of IPOs hit the market, catching the attention of investors,” he said.

Topping the list was Palantir Technologies (NYSE:PLTR), a data analysis company with links to the US government that was co-founded by Facebook director, Peter Thiel.

Palantir, named after the magic crystals in JRR Tolkien’s Lord of the Rings novel, saw the largest number of trades in its shares by eToro users from around the world after its IPO.

“On September 30, which was its first day of trading, Palantir saw a huge volume of trades on eToro, beating the number of trades placed on Warren Buffett-backed Snowflake on its first day on September 16,” Gilbert said.

In its IPO prospectus the company said it wanted to become the ‘default operating system for data [management] across the US government’.

Shareholders of Palantir rose by 163 per cent into the first week of October, said the trading platform.

Video games platform Unity Software targeted by investors

Unity Software (NYSE:U) jumped 44 per cent on its debut on the New York stock market last month and has market capitalisation of $US24bn.

A platform for video game developers, Unity is associated with hits like Pokemon Go and Call of Duty.

“The number of holders of Unity on eToro increased by 320 per cent from September 18 to October 6, and this is likely the result of the share price increasing 21 per cent in the period,” Gilbert said.

Snowflake (NYSE:SNOW) provides cloud-based technology for data analysis purposes and attracted interest from legendary investment guru Warren Buffett.

“Snowflake’s current valuation is 230 times its revenue with a share price of more than $US250,” said Gilbert.

Workflow software company Asana goes direct to public

Task management software firm Asana (NYSE:ASAN) also joined the New York stock market in September and is another top IPO.

The company has Facebook early investor Dustin Moskovitz as a co-founder, and like Palantir the company decided on a direct listing on the stock market whereby only existing shares are sold to the public.

Another popular IPO for eToro investors was Sumo Logic (Nasdaq:SUMO) a pioneer in ‘continuous intelligence’, a new category of software with applications in cloud computing, automation, and Software as a Service infrastructure.

JFrog (Nasdaq:FROG) is known for its Artifactory product that stores software updates on a universal platform allowing the release of continuous updates.

Telehealth and distance learning companies also top IPOs

One the top IPOs for September was telehealth provider American Well (NYSE:AMWL), which connects patients to doctors through video conferencing software.

Also on the list is Vitru (Nasdaq:VTRU) a distance-learning education company with roots in Brazil that delivers courses in more than 200 subjects to secondary school students.

“Investors are eagerly awaiting two highly anticipated IPOs from Airbnb and Ant Financial Group which are both expected to list later this year, with Ant Financial predicted to be the biggest IPO ever,” Gilbert said.