As the first quarter of 2022 draws to a close, the parade of IPOs ends with a whimper – there was no IPO this week and only one last week.
After a banner year 2021 for IPOs, the pace of newcomers to Wall Street has slowed significantly in an environment marked by market volatility, geopolitical turmoil and monetary policy tightening.
“The U.S. IPO market remains on life support,” said Bill Smith, managing director of Renaissance Capital.
There have been just 18 IPOs in all this year, raising a median of just $27 million, the weakest market for new IPOs in more than 20 years.
The main factor of stagnation was the unease generated by the war in Ukraine.
“Whenever there are international tensions, you see a big drag on offers from Wall Street,” said Franck Sebag, partner at EY in France.
“It’s very difficult to consider an IPO when the market is so volatile,” said Gregori Volokhine of Meeschaert Financial Services.
“Everyone is becoming more cautious, including companies considering IPOs and investors who normally gravitate toward such ventures,” Volokhin said.
The 2021 IPO market was the richest in history, with 2,682 companies raising $608 billion, according to PricewaterhouseCoopers.
But several of the most anticipated companies have fallen, including electric vehicle maker Rivian, which has lost more than 70% of its valuation since its peak. Others to see dramatic falls include trading platform Robinhood, down 84% since July, and entertainment company Roblox, down 66%.