The declines within the U.S. inventory market that began early this yr have scared off traders in know-how startups and led to the longest stretch and not using a tech preliminary public providing (IPO) on this century.
Wednesday (Sept. 21) would be the 238th day and not using a tech IPO of over $50 million, beating the information set after the 2008 monetary meltdown and the dot.com bust within the early 2000s, in response to researchers at Morgan Stanley.
High inflation has pushed the Federal Reserve to lift rates of interest, dampening enthusiasm for development shares that have been massive winners throughout final yr’s growth. The tech-heavy Nasdaq is down 28% this yr, in comparison with the 19% drop within the S&P 500, the Financial Times reported Sunday (Sept. 18).
Tech startups have been hit hardest, but it surely’s not simply tech. The Financial Times reported that total U.S. IPO volumes are down 94% year-over-year, with simply $7 billion raised to date in comparison with $110 billion presently final yr.
Matt Walsh, head of tech fairness capital markets at SVB Securities, advised the Financial Times, “There’s a tremendous amount of uncertainty in the market right now, and uncertainty is the enemy of the IPO market.”
Walsh anticipated a “a small group” of firms would enterprise an IPO this yr, however most have already pushed their potential inventory listings into 2023.
Read extra: FinTech IPO Index Sheds 2% as Slumping Tech Stocks Offset nCino, 9F Gains
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