By CultureBanx Team

• Demand for IPOs is down 12% globally for companies
• Fast fashion giant Shein has confidentially filed for a public listing in London

Wall Street seems to have pumped the brakes on Initial Public Offerings (IPO) as the markets continue their roller coaster run. Globally, IPO demand is waning down 12% as companies continue trading below their offer price. Herein lies the problem, fund managers tend to shy away from new issues, if recent ones they have bought are performing badly. This could keep IPO activity in the doldrums for the remainder of the year.

Why This Matters: There are plenty of companies waiting for their chance to shine on a big stock exchange. Fast fashion giant Shein has confidentially filed for a public listing in London, according to CNBCThe biggest desire for these companies is stability both in the financial markets and in the broader economy. However, falling stock prices are contributing to significantly lower valuations, which damp the allure of a public debut.

If we look back over the last few years companies coming to the public markets have a rough time. IPO activity globally between September and November 2022 plunged 45%. IPOs from 2021 are today largely in the red also dampened investor confidence. The IPO market is having its slowest year in more than a decade, with just $7.2 billion raised in traditional new stock offerings in the U.S. Some of the publicly traded companies that have dug themselves into a deep hole post IPO include Rent the Runway, Robin Hood, Oscar Health and Toast. The companies are down anywhere between 50% – 85% from their initial public offering price.

Situational Awareness: A huge share of POs were SPACs in 2021. The majority of IPOs were trading above their offer prices, but by the end of last year, two-thirds traded below. In the three quarters ended Sept. 30, 2022, 76 SPAC IPOs on U.S. exchanges made $12.41 billion, down from the 450 listings that raised $124.07 billion over the same period in 2021.

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