US IPO Weekly Winners & Losers

After a short-lived rally, the IPO market is once again near its 2022 lows.

The IPO Index tumbled -10.4% this week, compared to a -2.8% loss for the S&P 500. Industrials and consumer goods led the list of top performers, while high-growth tech and healthcare saw the biggest declines.

By now it’s a familiar culprit: The US Fed signaled aggressive rate hikes to tackle inflation. The cost of capital is rising, so companies without cash flow have been hit hardest. That includes many IPOs.

Even the 2022 IPO class has struggled, despite pricing in a tough environment. The years' eight sizable deals average -12.5% from offer. In order for activity to pick up, investors need to feel confident that a deal will hold up.

The pipeline provides some encouragement. Famed piano brand Steinway (NYSE: STWY) recently filed to return to public markets. News also broke about upcoming IPOs from energy services play Atlas Sand, crypto trading platform Blockchain.com, and Cummins Inc.’s filtration unit.

One small US IPO listed in the US this week. Singapore-based cleaning company JE Cleantech (Nasdaq: JCSE) soared 375%, the latest micro-cap turned casino game. We pointed out in a blog post that the year’s three previous IPOs to fly up 300% or more have all seen their initial gains wiped out.

Last week we published a new report on the 2022 SPAC market, which included the chart below showing that deal announcements no longer cause a pop. It had been one of the clearest signs of mania in the 2021 SPAC market.