IPOs Start 2023 in the Doldrums, Mirroring 2022’s Sad Showing

With an anxiety-prone stock market not showing a lot of lift after last year’s losses, companies are holding off on going public.


Initial public offerings, which cooled off last year after a torrid 2021, are not showing much zip thus far this year. To blame: lack of animal spirits.

In 2023, there have been just 37 IPOs filed, up slightly from 35 for the same period the year before, according to Renaissance Capital, which specializes in new issues.

The problem, of course, is that the stock market fell hard in 2022, with the S&P 500 losing almost 20%. 2023’s performance has so far been so-so, as the index has logged a 5.4% total advance, with January a decent month and a falloff in February. That record has not inspired confidence in companies looking to make a big score.

Last year’s stinko IPO performance contrasts vividly with the record set in 2021. Just 71 filers raised almost $8 billion in 2022. The year before, there were 397 offerings and $142 billion garnered, per Renaissance.

The headwinds at the moment are harsh, a PitchBook analysis declared. Still-persistent inflation, uncertainty about rising interest rates, geopolitical unrest and a possible recession are all weighing on the IPO market, the research organization noted.

Deals that have been announced this year have been small, with the larger ones on hold amid a volatile and tepidly growing equities field. Structure Therapeutics, a biotech firm, went public in early February, raising $185 million, and gained 45% as of Friday’s close. Skyward Specialty Insurance Group, which focuses on property-casualty coverage, did its IPO in mid-January, garnering $134 million; it’s up 43%.

Tellingly, the bigger offerings are waiting until market prices have improved. Japanese holding company SoftBank Group Corp. plans to bring its Arm chip-making unit to market sometime later this year and bag an estimated $8 billion, a Reuters report said, citing people familiar with the plan.

When might IPOs stage a comeback? Forecasts are all over the place, ranging from this year’s second half to several years away. History shows, according to PitchBook, that IPOs usually do not take too long to recover, although long delays are quite possible.

After the dot-com crash in the early aughts, offerings took two years to rebound, the report said. Following the global financial crisis of 2008 and 2009, they surged in late 2009, thanks to massive fiscal and monetary aid.

A Washington stimulus effort also sparked the most recent turnaround: The pandemic IPO pullback lasted just six months “and was then followed by the most active IPO market in the past two decades.”

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