This financial year has not been a very good one or even an okay one for that matter for the US markets and even most of the global markets. With prestigious companies dropping their share prices the IPO’s were already deemed for a future in the dark.
Companies making their debut on the U.S. stock market are continuing to get a rough welcome, especially if they are losing capital, casting a shadow over the calendar for initial public offerings for the rest of the year. The postponement of the WeWork IPO has highlighted how confidence is eroding in the market both for companies looking to raise capital and investors. A more discerning market for initial public offerings continued to punish Peloton Interactive Inc. and some more recent names of the IPO list on Friday, a day after Peloton began trading. Shares of the fitness startup closed down 2 percent at USD 25.24 and are now off 13 percent from their IPO price. The company is now trading 15 percent below its Wednesday IPO price. With blunders like these and misfortunate debacles of these IPOs, we should not be expecting anything great from the markets of the world. Public market investors who trade for profits in intraday fashion have typically expected companies to become profitable within 18 months or so of an IPO. This timeline has been relaxed with the money manager’s eager to add businesses with fast-growing revenue to their portfolios.
The uncertainty of the global markets following the United States and China trade war is a key factor is the demise of IPOs on the markets all over the globe.