All but three of the 53 tech-related companies tracked by CNBC that went public last year via an IPO or direct listing are now trading below their offer price (for IPOs) or opening price (for direct listings) as shares and valuation of tech companies slump amid sell-off.
The drop in the share price of technology companies has been especially harsh for companies that made their market debuts in 2021.
According to reports, more than half of these companies’ shares have fallen by at least 50 percent, including some of the most well-known names, such as trading apps Coinbase and Robinhood, electric carmaker Rivian, cloud software vendor UiPath, and fintech companies Marqeta and Toast, which have all lost more than 60 percent of their value.
This can be attributed to the impact of the sell-off that began late last year as soaring inflation and concerns about rising interest rates drove investors away from the riskiest assets with the highest multiples.
The downturn accelerated in February following Russia’s invasion of Ukraine, and it approached panic-selling territory late last week as the market digested Federal Reserve commentary and a half-point increase in its benchmark interest rate.
IPOs are the last thing investors want to touch right now, and as a result, the market for new issues has been dry since the beginning of the year, with no tech IPO calendar for the remainder of the second quarter.