Investors that have spent any more than a few years in the markets are aware of boom-bust cycles.
In the IPO (or ‘Initial Public Offering’) market, the boom-bust cycle has never been more pronounced than in the past two years.
IPO’s hit their speculative high in February of 2021 as extraordinarily easy money policies fueled a boom. Remember how the US Government was handing out $600 to anyone who could fog a mirror… and to way too many that had not breathed a breath in years? Guess where some of it went…
In 2021, almost 400 IPOs made it to market while this year that number collapsed to just 71.
Based on money raised, the collapse has been even more stunning. The worst prior collapse was during the Financial Crisis in 2008 and 2009, yet even then three times as much money was raised via IPOs compared to 2022.
From a sky-high $142 billion raised in 2021 to a puny $7.7 billion in 2022, the IPO market cratered by almost 95%. (Chart from Wolfstreet.com)