Tuesday, May 21, 2024
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It’s Quiet Again in the IPO Market. The Reason for the Change in Attitude is as Follows

In IPO world, things are really quiet right now.

Here it is: huge initial public offerings (IPOs) eager to go public before the holiday season begins typically occur in the weeks leading up to Thanksgiving.

“It should be occurring now, whatever you are going to get between now and the end of the year,” said Don Short, InvestX’s head of venture equity.

But nothing is occurring.

“In a weak market, the excellent firms don’t want to go public, and the poor companies can’t go public,” Renaissance Capital’s Matt Kennedy stated.

Many candidates for initial public offerings (IPOs) are appearing to be reconsidering or delaying their debuts due to a bad October stock performance, higher-for-longer interest rates, poor post-market results from the recent wave of IPOs this summer, and the possibility of drastically reduced values.

A deal-killer in particular was the 10-year Treasury yield’s continuous climb.

According to Greg Martin of Rainmaker Securities, “it was a tremendous wet blanket” for the IPO market.

Delaying first public offerings

The IPO of Waystar, which was thinking of starting its roadshow this past week, is apparently postponing till December or maybe 2024.

In ahead of a potential IPO next year, Panera Bread reportedly plans to lay off 17% of its corporate staff, according to a Wall Street Journal report last week.

Others who remain interested in an IPO could have to make some pretty big sacrifices.

Another often-cited IPO possibility, the buy now, pay later company Klarna, said CNBC that it does not currently have any intentions to go public. At its most recent funding raise, the corporation was valued at $6.7 billion, a significant 85% lower than its previous valuation of about $46 billion.

Though sources familiar with the business’s intentions told Bloomberg the company was aiming a valuation of $80 billion to $90 billion, Chinese fast-fashion behemoth Shein has not decided on the timing or valuation of an IPO. Still, the corporation was valued at $66 billion in May, the year of the most recent investment round.

Source (CNBC)

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