IPOs on US stock exchanges plummeted

As of the end of Wednesday, there have been 238 days on the US financial market without an initial public offering (IPO) with a size of more than 50 million USD.

The decline in the US stock market so far this year has created the longest “drought” in the history of US technology companies’ IPOs this century. Many analysts are cautious about the recovery scenario even though many other industries are showing signs of recovery.

According to the Financial Times, as of the end of Wednesday, there have been 238 days on the US financial market without an initial public offering (IPO) with a size of more than 50 million USD.

Thus, the golden period of technology IPOs since the 2008 global financial crisis and the collapse of the dotcom bubble in early 2000 has officially ended, research by the technology capital markets group of Morgan Stanley let me know.

From the beginning of 2022 until now, the US stock market has been heavily affected by the Fed’s fight against inflation through a series of hikes in basic interest rates in the US dollar.

High interest rates hurt stock valuations because they reduce the value of future profits, and it scares off many people about the possibility of an economic downturn.

In the last year, in the IPO market, high-valued technology stocks dominated the market, these stocks immediately rose sharply after the listing, along with the general uptrend of the market. This year, stocks fell sharply after a series of sell-offs in the stock market.

The Nasdaq Composite, which is dominated by technology stocks, has fallen nearly 28%, while the S&P 500 has lost 19% of its value this year. The Renaissance IPO Index, which tracks shares of listed US companies over the past two years, has fallen more than 45%.

Head of capital markets at SVB Securities, Mr. Matt Walsh, commented: “There are too many volatile factors in the market right now, instability can be considered as the “enemy” of IPO activities. .

“I think we need to get a period of stabilization, when investors can dare to buy shares publicly before they take on more risk and buy IPO shares of the technology industry,” he said. Walsh forecast.

Corebridge life insurance company completed a $1 billion IPO last week, this cautious sentiment is evident among many large and already profitable businesses.

Even after Corebridge’s IPO, the total value of US IPOs fell 94% year-over-year. So far this year, just over $7 billion has been raised, compared with $110 billion in the same period last year, according to Daelogic.

The group of technology businesses in the S&P 500 index announced second-quarter earnings that met expectations, according to FactSet calculations. However, the profit forecast for the second quarter of 2022 has been revised down.

Many tech businesses have responded by placing a lot of emphasis on cutting costs and adjusting operations, but Brookshire said it will take time for businesses to see how the change will have an impact.

According to Trung Men/Business Lifestyle