It would appear that my question from some months ago, "Is this the beginning of the end?", may be true. For all those who have forgotten the dot com slide, it took over a year to bottom out. Hang on for the ride! .....Aivars Lode
The IPO market has gone from hot to not.
Shares of newly public companies, earlier this year one of the hottest investments on Wall Street, are now in a slump after investors soured on unprofitable startups from Uber Technologies Inc. to WeWork.
Shares of technology startups and other companies that went public in the U.S. this year are trading roughly 5% above, on average, their prices at their initial public offerings, well short of the 18% gain in the S&P 500 index, according to Dealogic data. That is a reversal from earlier in the year, when IPO shares were big outperformers.
IPO-stock performance is the worst it has been since at least 1995, according to a recent research note from Goldman Sachs, whose analysts measured it relative to a broad stock-market index.
That and recent market gyrations have helped bring IPO activity to a virtual standstill heading into what is traditionally one of the busiest times of year for new issues, as companies planning debuts wait for conditions to improve.
The stall upends expectations that 2019 would be a record year for IPOs by money raised. It also highlights the risks for private investors who have endured long periods of losses funding a crop of companies that are older and bigger than IPO candidates in previous cycles. That could put a chill on a private-funding market that has been red hot and hamper the ability of the next generation of startups to raise seed capital.