While still not as extreme as during the dot-com bubble, unprofitable company IPOs have surged since the financial crisis, with many outperforming the market in the short term:
Unprofitable Companies Are Raising the Most IPO Cash Since the Dot-Com Era
Note: As of Sept. 20, 2019. Percent change calculated as the offer price to the close 30 days from the effective date. Includes U.S. listed IPOs with offers greater than or equal to $100 million reporting financials in USD, CNY, EUR, CAD, or GBP. Excludes closed-end funds, REITs, SPEs, and SPACs. Net Income, where available, measured on a GAAP basis on effective date.
Here is the money quote:
“Unprofitable companies are raising money in initial public offerings at the fastest pace since the dot-com bubble when a revolution in the banking industry sparked a rush to risk…
The 2019 class of IPOs may turn out to be as risky as those dot-com companies that went bust at the turn of the century despite the exuberance surrounding them. But there may be a reason why investors keep going to the IPO trough—regardless of profitability or an immediate pathway to riches.”