2022 turning out to be a very lean year for tech IPOs in US

30 Sep 2022 , 08:36 AM

Initial public offerings by American IT businesses have fallen to their lowest levels since the global financial crisis of 2008, as investor mood toward new listings has been soured by stock market volatility, skyrocketing inflation, and interest rate hikes.

Only 14 tech businesses have floated their shares on stock exchanges so far this year, compared to 12 in 2009, according to Refinitiv statistics. This year’s IPOs raised $507 million, which is the least amount from flotations since 2000.

In the first nine months of this year compared to last year, total IPO volumes decreased by 90.4%.

According to analysts contacted by Reuters, the sharp decline in stock market valuations has discouraged tech companies from seeking stock market debuts.

The S&P Information Technology index’s forward P/E ratio was around 20.18, which was the lowest level since April 2020.

The largest and most liquid U.S. IPOs are represented by the Renaissance IPO index, which has declined 50.4% this year compared to a 23% decline in the S&P 500 index.

On Wednesday, shares of Corebridge Financial Inc., which had the largest IPO in the United States this year, were trading nearly 4% below their $21 offer price.

Chobani, a manufacturer of Greek yogurt, canceled its intentions to open a U.S. Several other well-known companies, including Reddit and ServiceTitan, postponed their ambitions to go public this year until earlier this month.

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