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Lackluster IPO Performance This Quarter Could Impact Upcoming Listings

The tepid market reception of some recent initial public offerings bodes poorly for other IPOs scheduled to hit in the near future, Bloomberg News reports.

During the trading week that ended July 16, according to Bloomberg, 18 IPOs were priced — a tie with two other weeks in 2021 for the calendar year’s busiest week to date.  As the week drew to a close Friday, two big IPOs fell short of investors’ expectations, according to Bloomberg.

Stevanato Group SpA and Bridge Investment Group Holdings Inc. both fell short of price targets, Bloomberg reported, and IPOs held Thursday also came in below target. The reason, Bloomberg speculated, was broader economic concerns worrying traders.

The timing of what may be a slump is especially significant because two big IPOs are scheduled to occur soon — those of Robinhood Markets Inc. and Instacart Inc. loom in the near future.

For all 18 Wall Street IPOs held during the trading week that ended July 16, Bloomberg reported, the average pricing was 1.3 percent below the offerings’ prices.

The trend identified by Bloomberg comes just two weeks after observers were hailing the summer of 2021 IPO market as an especially strong one. Investors applauded both the number of IPOs and the investor interest they were generating.

Joining conventional IPOs in making the summer a busy season of listings has been the proliferation of SPACs, or special purpose acquisition companies used to take businesses public.  While the SPAC sector has faced some pressure from regulators, it remains an important, albeit a diminished, force, according to reports.

Platform companies such as Robinhood, according to analysts, have been especially popular — particularly those that enable financial transactions and therefore are hard to replicate cheaply.

 

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