Wall Street Jitters Over Market Volatility Put IPOs on Ice

The once super-hot arena for initial public offerings (IPOs) is being put on ice as Wall Street jitters over market volatility send startups turning to private equity for funding, kicking public listings down the road, or putting up for-sale signs.

While industry pundits forecast it will take months before there’s a rebound in freefalling valuations and wild market swings, private fundraisings are still in the race, closing deals in record numbers.

“Everything is on hold at the moment,” Derek Dostal, a capital markets partner at law firm Davis Polk, told Financial Times on Wednesday (Feb. 9).

Dostal added that few companies want to throw two weeks at a roadshow when the market is all over the place.

See also: Two-Thirds of 2021’s IPOs Now Trading Below Offering Price

Dialogic data shows a mere 13 companies notched $2.1 billion in the U.S. in IPOs this year, FT reported. During the same frame last year, startups raised close to $20 billion.

The private equity firm TPG was the lone success, raising funds topping $250 million, the Journal said.

“The one thing [the IPO market] struggles with the most is the uncertainty that comes with volatility,” the head of equity capital markets at a large investment bank told FT. “Generally, things are [being] pushed out to the second quarter.”

Read more: Paytm’s Busted IPO Shows Investors’ Fears Over Long-Term Prospects

Special purpose acquisition companies (SPACs) raised over $6 billion this year, compared with $26 billion during the same time frame last year.

“The SPAC fad has clearly passed,” Adam Fleisher, a partner at the law firm Cleary Gottlieb, told FT. Numerous companies listed in 2021 are trying to find targets.