This is not the year for new companies to have their hand out on Wall Street, looking for a big IPO for their prospective unicorn. And that is putting it mildly.
The market for IPOs and SPACs has fallen off the proverbial cliff this summer. Usually, June through August is a slow time in the financial world for companies to go public, but all of 2022, the IPOs have been AWAL, down 80$ from the same period in 2021.
A total of 94 companies have even bothered to file for an IPO this year, which is down 70% from last year.
Part of the reason is that the gravy train of 2021 created some out-of-touch valuations on companies, and this has been a season of things being brought back to normal, according to a story in CNN Business.
Here’s what Rachel Gerring of EY Americas told CNN.
“Valuations have largely been correcting themselves from the highs of 2021. The underperformance of companies that went public in 2021 doesn’t bode well for companies looking to go public now. Companies are waiting to see how things level out.”
As for which companies might dip their toes into the dangerous IPO waters in the next four months are the licensed sports apparel and gaming company Fanatics and crypto investment firm FTX.
Fanatics has a pre-IPO valuation of $27 billion, and FTX is valued at $32 billion.
Two legit unicorns that investors are hoping to go public because of their stratospheric valuations are SpaceX and ByteDance. You know who (Elon Musk) owns SpaceX and ByteDance is the Chinese owner of TikTok. According to the story in CNN Business, both are valued north of $100 billion.
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