From the best of times, to the worst of times: The market for initial public offerings has fallen off a cliff in 2022.
Investors faced with high inflation and rising interest rates have ditched high-flying growth stocks and turned to safer, more profitable alternatives. The decline has been striking given the record level of proceeds raised through public markets just a year prior. U.S.-listed companies raised over $155 billion in proceeds in 2021 through their initial public offerings, according to data from EY and Dealogic. In the first half of 2022, they only raised $4.8 billion.
"Investors are really risk averse at this moment, and that’s what’s really impacting the lack of activity that we’re seeing," said Rachel Gerring, IPO leader at EY Americas, in an interview with CNBC. "They’re looking for companies that are focused more on growth and profitability as opposed to the growth at all costs that we were seeing in 2021."
Watch the video above to find out how the IPO market went from boom to bust in 2022, and whether experts forecast a rebound in 2023.
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How The IPO Market Went From ‘Boom To Bust’