September 30, 2022
According to Refinitiv data, the IPO market for U.S. technology companies was the worst since the 2008 financial crisis, owing to a variety of economic factors including stock market volatility, interest rate hikes, and rising inflation. Moreover, this year’s IPOs of U.S. technology companies attracted the lowest market valuations since the 2008 global financial crisis.
According to Refinitiv, there have been 14 IPOs of U.S. technology companies this year, up from 12 in 2009. Despite the increase in numbers, U.S. technology companies have raised $507 million, the lowest amount since 2000.
While the unwillingness of U.S. technology companies to conduct IPOs is attributed to the sharp decline in market valuations, according to Rachel Gerring of Ernst & Young, the poor post-IPO performance over the past year has deterred investors, resulting in a 90.4% drop in IPO volume in the first nine months of this year.
This year, the Renaissance IPO index fell 50.4%, while the S&P 500 index fell 23%. Moreover, the price-to-earnings ratio of the S&P Information Technology Index fell to its lowest level in two years at 20.18. Corebridge Financial Inc, the insurance company that launched the largest initial public offering in the United States, closed 4% below its offering price on Wednesday.
The sources for this piece include an article in Reuters.
