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IPO Market Faces Worst Year in Two Decades. (wsj.com) 24

The IPO market is on pace for its worst year in decades, leaving fledgling companies with few options but to burn through cash while they wait for the stock market to calm. From a report: Late last year, hundreds of companies were in the final stages of preparing to go public, encouraged by the best 18 months ever for U.S. initial public offerings. Then a combination of factors -- sky-high inflation, rising interest rates and Russia's invasion of Ukraine -- sent shock waves through the stock market. The IPO pipeline froze. So far this year, traditional IPOs have raised only $5.1 billion all told, Dealogic data show. Typically at this point in the year, traditional IPOs have raised around $33 billion, according to Dealogic data that goes back to 1995. Last year at this point, these offerings raised more than $100 billion. The last time levels were this low was 2009, when the U.S. was recovering from the depths of the financial crisis and the IPO market reopened near the end of the year. IPO advisers say they don't expect 2022 to follow that pattern, meaning it could end up being the worst year for raising money in IPOs since Dealogic, a research firm, started tracking it in 1995.
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IPO Market Faces Worst Year in Two Decades.

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  • Oh no! (Score:2, Funny)

    by Anonymous Coward

    We're running out of Other People's Money!

    • We're running out of Other People's Money!

      Yup! The crypto bros have shot their wadd...and the cameras were not even rolling to catch the money shot.

  • No more crypto wealth No more housing wealth No more wealth for your silly-ass idea It's time to figure out what the needful is, and start doing that.
  • by nightflameauto ( 6607976 ) on Tuesday August 23, 2022 @01:52PM (#62815049)

    With all the stories, documentaries, web series, and on and on about how much shenanigans goes on with IPOs, is it really a bad thing to cut back on them for a bit? Not everybody has a unicorn idea, and not all ideas deserve millions in an IPO just to bungle something that's been done a million times over before, but this time with the "tech" buzzword somehow attached to it. (WeWork and such.)

    Is there any reason to see this as anything but a much needed correction?

    • Not everybody has a unicorn idea,

      true... But if you don't think it's a unicorn idea, or at least something that might be successful, then don't buy in. There's a reason there are boatloads of companies that fail - But without the funding infusion, the companies that are good will never succeed.

      • My thoughts are that the companies that are genuinely good will get the funding. We've just hit the point where even the VCs are going, "Wait, what is it you're trying to do here?" A few years back it was, "You have a tech company? MONEY! MONEY MONEY! MONEY!

        That's a recipe for failure time and time again. Which they didn't care about because one unicorn would make up for ten to fifteen failures. Maybe the unicorn era is over? Or maybe, just maybe, tightening budgets like we've been getting screamed at us fo

      • by ceoyoyo ( 59147 )

        then don't buy in

        That's what they're doing.

      • But without the funding infusion, the companies that are good will never succeed.

        Not true, companies that are good succeed, only slower.

    • It is if you bought lots of SPAC warrants recently!

  • Couldn't have happened to a nicer group of guys.

  • Editors, please do your job. Pay walled articles are just a waste of everyone's time.
  • The past 18 months the stock market has been artificially kept afloat by March 2020 Cares act and the Federal Reserve. The Cares Act authorized $450B for the Federal Reserve to support corporations. The Fed uses a 10-to-1 monetization, so that $450B was magically $4.5 trillion of US tax dollars thrown at Corporations - the vast majority of which was used for stock buy backs. Reducing stock in circulation increases individual value ~since there’s less of it~ raising stock price without any increase
    • It's been kept afloat since 2008 by the Fed printing trillions of dollars and buying stocks/bonds with it.

      • Sort of.... QE, or Quantitive Easing, put $700B into corporate hands and expanded the Feds balance sheet to $4.3Tr as of 3/2020. Come July 2022, thanks to Trumpkins CARES Act, the Fed's balance sheet has swollen to $8.89Tr. As stated in my 1st post, the Fed pumped $4Tr+ into greedy corporate oligarchs hands. https://www.statista.com/topic... [statista.com]
        Funny how money to rich is called stimulus, while money to the people is called welfare.
  • Is the only option for fledging companies to burn through cash? Do we really live in a world where sustainable, profit-driven company growth is not an option?
    • by ceoyoyo ( 59147 )

      On Slashdot, yeah, pretty much. Information harvesting and advertising get much more profitable if you're big. We've decided we're going to finance web stuff that way so there you go.

  • We need fewer publicly owned corps, not more.

    • Consolidation may not actually help the people you want to help.

      Perhaps there is some other metric that would better serve your goals or desires?

      • Not interested in consolidation, I just fewer companies to be publicly owned and more to remain privately owned.

  • by Virtucon ( 127420 ) on Tuesday August 23, 2022 @02:55PM (#62815271)

    You see it all the time over the few years with valuations on empty shells. A startup is created, it's funded by VCs who inflate the product and hype the management, even soliciting "star" board members who may be idiots at governance but bring credibility. Once they've been inflated they then go public and walk away or that's what they hope with huge profits. The big problem is the ultimate suckers, you and I with our 401Ks with fund managers who buy into the hype.

  • You own the NFT of something extremely valuable like an Ugly APE.
    With an IPO some other dude is spending your money and all you get in return is a worthless promise that one day you will be rich.

  • by SoftwareArtist ( 1472499 ) on Tuesday August 23, 2022 @08:57PM (#62816259)

    The IPO market is on pace for its worst year in decades, leaving fledgling companies with few options but to burn through cash while they wait for the stock market to calm.

    Or they could build sustainable businesses. Ones that have real products with real revenue, and can support themselves without constantly needing to find rich people to bail them out.

    Just kidding. Why would anyone do something crazy like that?

  • Usually the companies that just miss the IPO window are the crappy ones that were trying to cash in just as stock market mania was peaking and investors were desperate to catch the next potential hot IPO because they missed out on a successful previous one.

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