There were just seven IPOs in May that raised an aggregate $1.1 billion to mark the slowest month for new deals in more than five years, according to Bill Smith, co-Founder and Chief Executive of Renaissance Capital.
The U.S. initial public offering market is staring down another slow week with just one small deal on tap, capping a period of little-to-zero activity as investors eye volatile secondary markets amid high inflation, supply-chain snags and a war in Europe.
“The big macro overhang is rising interest rates, which are really poison for growth stocks,” Josef Schuster, founder of IPOX Schuster LLC and chief architect of the IPOX Indexes, told MarketWatch. From the archive: You bought. They sold. Meet some of the insiders who unloaded $35 billion in stock amid the tech IPO bonanza before it tanked.
One positive sign is that those companies that have braved the market in 2022 are performing well, said Schuster. Examples include oil-field services company ProFrac Holding Corp. PFHC, +3.11%, which is up about 10% since it went public in early May, and Excelerate Energy Inc. EE, -5.89%, which is up about 5% from its April debut.
Last week, Forbes and SeatGeek were forced to abandon SPAC deals, joining a growing roster of companies that had to cancel plans. Both Goldman Sachs GS, +0.57% and Citigroup Inc. C, +0.14% recently said they would no longer work on SPAC deals, he said, while Bank of America said it would reduce its exposure. Schuster compared the phenomenon to the 2000 dot-com period, when big bulge banks couldn’t get enough tech startup IPO businesses — until the crash and they all pulled away.This week’s sole deal is that of Phoenix Motor Inc. PEV, , a spinoff of SPI Energy Co. Ltd.
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