Last year, the companies challenged the pandemic coronavirus to go public at a record pace in the USA.
Now the market volatility, the inflation and fears of a slowdown brought an abrupt end to the wave of IPOs.
The companies raised just $4.9 billion through initial public offerings of actions in the US this year, less than 6% of the record sum raised in the first half of 2021, according to data compiled by Bloomberg.
The volume was about a tenth of the five-year average of $47 billion for the period.
Bankers say the IPO drought is unlikely to ease this summer in the northern hemisphere and could even drag on for the rest of the year if the economic outlook doesn’t improve.
“All these indicators that investors are very focused on will require a positive boost before we can expect an improvement in capital market activity,” said Alaoui Zenere, co-director of equity capital markets for financial institutions and fintech at the JPMorgan, referring to data such as the Consumer Price Index and the Cboe Volatility Index, known as the VIX.
“If the market stabilizes for a sustained period of time, we could see a decent amount of supply,” she said. “But if the market remains volatile, companies will take a prudent approach to accessing markets of capital.”
While IPOs are down from last year’s record around the world, the drop in the US is much steeper.
Volume in the US is down about 95% from this point last year, compared with a drop of just 41% elsewhere, according to the data.
So far in 2022, just two IPOs on US exchanges have raised more than $500 million each. Alternative asset manager TPG took in $1.1 billion in January, while Bausch + Lomb, an eye care arm of the health giant, hit $630 million in May.
TPG shares are down 13% through Monday’s close, and Bausch + Lomb is down 13% in its first month and a half as a publicly traded company.
The decline of these and other companies that have recently been listed on the stock exchange may have led those considering making a IPO to hesitate.
THE Coinbase announced a hiring freeze and rescinded offers to some job seekers after its stock lost more than three-quarters of its value this year.
Electric-vehicle maker Rivian — after raising nearly $14 billion in an IPO last year — struggles with supply shortages and manufacturing failures, pushing the paper down 73% since Jan.
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Source: Moneytimes
I am an author at Global happenings and I mostly cover automobile news. In my time working in the automotive industry, I have developed a keen interest in the latest developments and trends. My writing skills have also allowed me to share my knowledge with others through articles and blog posts.
