The IPO market's shift in sentiment and its impact on investors
The IPO market has become quiet as companies delay or rethink their debuts due to poor stock performance, higher interest rates, and concerns about lower valuations. The rise in the 10-year Treasury yield has dampened market sentiment. Companies like Waystar, Panera Bread, and Klarna have delayed their IPOs, while others may have to accept significant valuation cuts. The recent spate of IPOs has also underperformed, further discouraging potential candidates. Despite this, there is still a possibility of increased activity in December if the market rally continues. However, many older IPO candidates, such as Reddit and Stripe, are becoming less attractive as the focus shifts to AI companies. IPO candidates are left with the choices of going public with a haircut, staying private with reduced funding, or considering mergers or closures. The challenging market conditions have put many tech unicorns in a precarious position, with some facing the possibility of going out of business.