The IPO drought is about to break with Porsche set to raise $9.4 billion in its public debut
Porsche had initially been targeting a valuation of up to $85 billion, but has since lowered its targeted valuation range to between $70.1 billion to $75.1 billion.
Porsche's public debut will help break an ongoing drought in the IPO market, which has been devastated by a rolling bear market in stocks amid concerns of high inflation, soaring energy prices, and a potential economic recession. The US IPO market has suffered one of its longest stretches of minimal debuts since the unraveling of the dot-com bubble about 20 years ago. But it's the same story globally. According to data from Bloomberg, the global IPO market has raised just $80.5 billion, spread out over 1,617 deals so far in 2022.
That's in stark comparison to 2021's global IPO market, which raised more than $700 billion across more than 4,000 deals. Despite the overhang in capital markets, Porsche's confidence to go public is bolstered by a commitment from several investors to buy a large tranche of shares. A combination of the Qatar Investment Authority, T. Rowe Price, and Norway's sovereign wealth fund will purchase nearly 40% of the share offering.
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