Upcoming IPOs: The Good, The Bad and The Ugly

Upcoming IPOs: The Good, The Bad and The Ugly

Market corrections are always poison for initial public offerings. So it should be no surprise that there have only been a handful of IPOs so far in September. But this should be a good thing, as Wall Street will focus mostly on quality deals.

 

Yet, this does not mean you can buy just about anything. Let’s face it, tech IPOs are likely to continue to lag, especially as investors want to see more balance of growth and profitability.

 

“For those companies that do navigate the choppy IPO waters, they will be held to a higher standard and best be prepared to deliver results,” said Ron Heinz, who is a managing partner at Signal Peak Ventures:

 

“Numerous companies that are now public are trading below their initial offering price, and in many cases, now below their last private offering. This phenomena is creating an interesting dilemma for late-stage private financing and will put downward pressure on lofty valuations in later stage rounds.”

 

Just take a look at the performance of some of this year’s tech IPOs.

 

“Broadly speaking, it’s prudent to steer clear of an IPO filing when the markets have been so volatile,” said Vineet Jain, who is the co-founder and CEO of Egnyte:

 

“The bigger question is not when these private companies will IPO, but whether they can demonstrate fiscal success in front of an increasingly skeptical investor pool.”

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