Most companies that went public with a US IPO in 2021 are trading below their IPO price. Writes about it The Wall Street Journal with reference to the calculations of the analytical company Dealogic. According to her, in total, shares of 87% of such companies are traded below the placement price – on average, 49% below the placement (data on the share price last Friday). This is significantly worse than the picture with the shares of large US companies – since the beginning of the year, the S & P 500 index has fallen by 23%, and the NASDAQ – by 31%.
According to experts, such a decline in the price of shares of companies that have recently gone public deters many investors from buying shares in IPOs. “Investors expect the results after the IPO to be good, and this usually works. Recently results (of such companies.— “b”) are weak, which is one of the reasons we’re seeing low activity,” said Mark Schwartz, head of IPO & SPAC advisory at Ernst & Young.
The current year in terms of IPOs in the US will be the worst in more than a decade – since the beginning of the year, companies have raised only $7.2 billion in this way against a record $154 billion in 2021.