(Bloomberg) — The bear market has not been kind to the scores of technology companies that went public in the US during the pandemic, when issuers rushed to market while demand was hot and valuations soaring.
More than 80% of tech-related initial public offerings since March 2020 are trading below their listing price, according to data compiled by Bloomberg that looked at IPOs of at least $500 million.
The losers include some of the most-anticipated IPOs of the past couple of years, such as online brokerage firm Robinhood Markets Inc., electric-vehicle maker Rivian Automotive Inc., dating service Bumble Inc.
and language learning app Duolingo Inc.
The performance reflects investors’ sudden loss of appetite for the riskiest stocks, triggered by the Federal Reserve’s efforts to control inflation by raising interest rates.
The tech-heavy Nasdaq 100 Index has slumped nearly 24% since its November record, while the broader S&P 500 has fallen by half that in the same period.
“There will be a time when speculation comes back into fashion, but right now you have to hunker down and realize that things change and that you can’t use the same strategy all the time,” said Mark Grant, chief global strategist at Colliers Securities LLC.
Shares of companies with the fastest expected growth, some of which were pandemic beneficiaries, performed phenomenally last year and a lot had been priced in, said Mark Hawtin, investment director at GAM.
“That has now created a situation which has gone from being, fairly fully valued to one where there’s immense opportunity,” he said.
To be sure, there are still a few companies that have made gains since going public.
Among them, Warren Buffett-backed software firm Snowflake Inc., GlobalFoundries Inc. and home rental company Airbnb Inc. are all trading higher.
Tech Chart of the Day
The Roundhill Ball Metaverse ETF, which features stocks like Roblox Corp., Meta Platforms Inc.
and Nvidia Corp., surged late last year as the metaverse became one of 2021’s tech buzzwords, but with the macro environment changing the ETF has fallen 40% this year compared to the Nasdaq 100’s 23% drop in the same period.
Top Tech Stories
- Apple Inc.
unveiled a flurry of new software features and services at its Worldwide Developers Conference, including an updated iPhone lock screen, multitasking features for the iPad and a pay-later service that vaults it further into finance
- Apple unveiled the most significant overhaul to its popular MacBook Air laptop in more than a decade, bringing a fresh design, new colors and a speedier M2 processor from its homegrown chip line
- All smartphones and tablets would have to use a common charger under a provisional European Union agreement clinched Tuesday.
The plan would force all companies — most notably Apple Inc. — to make phones, tablets, e-readers and digital cameras to use the USB-C charger, negotiators said
- Digital watch dials offered on the Samsung Galaxy App store violated trade marks for Swiss watch brands including Omega, Blancpain and Tissot, a London court ruled
- ByteDance Ltd.
is considering selling a minority stake in Poizon, an online marketplace for sneakers, according to people familiar with the matter
- SoftBank Group Corp. spent $130 million to snatch up its own shares the day after its Vision Fund reported a record loss, for its biggest single-day buyback in more than a year
(Updates share move in fourth paragraph.)
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