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IPO Market on Track for Worst Year in Decades

By:
S.J. Steinhardt
Published Date:
Aug 22, 2022

1024px-Wall_Street_-_New_York_Stock_Exchange

The recovery from the 2008-09 financial crisis seems like a distant memory, at least when it comes to the IPO market, which is on track to experience its worst year in decades, the Wall Street Journal reported.  According to Dealogic, which tracks IPOs, traditional IPOs have raised only $5.1 billion so far this year. In a more typical year, traditional IPOs have raised around $33 billion by this point.

The gyrations in the stock market—whipsawed by rising inflation, interest rate increases, supply chain woes, and the disruptions occasioned by the Russian invasion of Ukraine—have killed the momentum of the last 18 months, which were the best ever for initial public offerings. Some companies may be forced to burn cash while waiting for the right time to go public, =others seek private investment money, and others have resorted to laying off workers as a cost-cutting measure.

In the face of an impending recession, investors are sitting tight.

“It might feel a little better because the market has bounced in July, but there’s still so much uncertainty,” Janus Henderson Investors portfolio manager Denny Fish told the Journal. “There’s just not a market for companies coming public right now.”

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