The IPO market has grown quiet again. Here’s what is behind the shift in sentiment

by | Nov 9, 2023 | Financial

In this articleFollow your favorite stocksCREATE FREE ACCOUNTTraders working at the New York Stock Exchange (NYSE), on Sept. 20th, 2023.NYSEIt’s quiet out there in IPO land — very quiet.This is it: the weeks before Thanksgiving usually bring a spate of large IPOs eager to go public before the holiday season starts.”Whatever you are going to get between now and the end of the year should be happening right now,” Don Short, head of venture equity at InvestX, told me.Except, nothing is happening.”The bad companies can’t go public, and the good companies don’t want to go public in a bad market,” Matt Kennedy from Renaissance Capital said.A terrible performance for stocks in October, higher-for-longer interest rates, poor after-market performances from the recent spate of initial public offerings this summer and the prospects of dramatically lower valuations appear to be causing many IPO candidates to rethink or delay their debuts.The steady rise in the 10-year Treasury yield was a particular deal killer.”That was a big wet blanket” for the IPO market, Greg Martin from Rainmaker Securities told me.Companies delaying IPOsWaystar, which was considering launching its roadshow last week, is reportedly delaying its IPO until December or into 2024.Last week, the Wall Street Journal reported that Panera Bread was laying off 17% of its corporate staff in advance of a possible IPO next year.Others still interested in an IPO may have to take very large haircuts.Buy now, pay later firm Klarna, another oft-mentioned IPO candidate, told CNBC it has no immediate plans to go public. The company last raised cash at a valuation of $6.7 billion, which marked a massive 85% haircut to its previous valuation of nearly $46 billion.Chinese fast-fashion giant Shein has not made a decision on the timing or valuation of an IPO, but sources familar with the company’s plans told Bloomberg the company was targeting a valuation of $80 billion to $90 billion. However, the most recent funding round in May valued the company at $66 billion.This is in stark contrast to most years, when big IPOs went public in November and December.Rivian, the biggest IPO of 2021, priced on Nov. 9, 2021, and began trading the next day. Hertz raised $1.3 billion in Nove …

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