Tech IPOs ๐Ÿ“ˆ๐Ÿ“‰

Tech IPOs

Tech investors, howโ€™s your portfolio doing?

Tech IPOs have hit a fork in the road as the bull market turned bearish this year. CNBC found 55 tech companies that debuted through an IPO, a special purpose acquisition (SPAC) company, or a direct listing. Only one of them, GlobalFoundries, is less than 20% below its previous high price.

The remaining 54 companies are in bear market territory. A bear market is usually described as a price decline of 20% or more. And in the previous week, ten of those companies have fallen at least 20%. But an even worse piece of data, 23 of those companies have lost half or more of their market value since their highs. Why?

Rising inflation and the possibility of increased interest rates are wreaking havoc on companies that may need outside funding to expand. Investors are ditching the high-value, high-growth, money-losing companies and are putting their capital in less risky investments.

Employees at tech companies that haven’t yet made it through their post-IPO lock-up period, which lasts for six months after the offering, have been stung the hardest by the sell off. During the lock-up period, investors canโ€™t sell any shares. For example, insiders at electric vehicle maker Rivian are locked until mid-2022, leaving them exposed to the companyโ€™s 35% plunge since mid-November.

The tech market’s plunge might affect the few remaining IPOs this year and potentially through 2022.

I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.

Share:
More Posts
Get your daily Invstr Crunch

Get the market news and updates you need, delivered to your inbox or available on our daily podcast.

Risk Disclosure:

Invstr is not a bank and banking services are provided by Vast Bank, N.A.

Brokerage and Banking services are currently only available to U.S. residents.

Invstr app and web services are provided by Invstr Ltd. Advisory services are provided by Invstr Financial LLC, an investment adviser registered with the Securities Exchange Commission (SEC) details of which can be obtained here. Securities brokerage and custody services are provided by Apex Clearing, a broker dealer registered with the SEC and a member of FINRA and SIPC. There is no bank guarantee on securities and securities may lose value.

Investing involves risk and can lead to losses. Past performance does not guarantee future results.

Invstr app and web services are provided by Invstr Ltd. Invstr+ advisory services are provided by Invstr Financial LLC, an investment adviser registered with the Securities Exchange Commission (SEC). Securities brokerage and custody services are provided by Apex Clearing, a broker dealer registered with the SEC and a member of FINRA and SIPC. There is no bank guarantee on securities and securities may lose value. Vast Bank N.A. a nationally chartered bank and member of the FDIC, provides the banking products, including the products and services related to digital asset accounts. As with any asset, the value of Digital assets can go up or down and there can be a substantial risk that you lose money buying or holding digital assets. You should carefully consider whether trading or holding Digital assets is suitable for you in light of your financial condition. Your digital account does not support wallet to wallet transferring of your digital assets (i.e. cryptocurrencies) outside the platform. Any Digital Assets in your digital asset account are not insured by any government entities, including but not limited to FDIC or SIPC. The Invstr Visaยฎ Debit Card is issued by Vast Bank, N.A. pursuant to a license from Visa U.S.A Inc and may be used everywhere Visa debit cards are accepted. Invstr Ltd, Invstr Financial LLC and Invstr Securities Ltd are subsidiaries of Marketspringpad Holdings (collectively “Invstr”) and Invstr is solely responsible for the application services and website content.

Watchlists provided when users first access the service are not a recommendation to invest. Instead they are provided to help users better navigate the service. Users are free to edit and create their own watchlists. From time to time, Invstr will suggest instruments solely based on an individual’s interest and the interest levels of the Invstr community. The statistical and portfolio builder models generated by Invstr do not reflect actual investment results and are not guarantees of future results. Comments provided by Invstr leaders, influencers or members of the Invstr Community are not recommendations and should not be construed as such. Invstr does not endorse the content or the positions posted by them. Their investment approach, and that of the models provided by Invstr, may be different from yours and may not be appropriate for you.