Now might not be the best time to go public. At least not for a few companies that have decided to postpone their IPOs due to the recent instability in the stock market.
Hearing-care services provider Hear.com and communication-technology company Zenvia were both scheduled to start trading on May 14. Now, it isn't clear when Hear.com and Zenvia will move forward with their IPOs.
In a company press release, Hear.com officials said they decided to postpone the IPO due to “current challenging equity market conditions” and that they will continue to monitor the market for more stable conditions.
Enact Holdings also postponed its IPO.
Private mortgage insurance company Enact Holdings Inc., a subsidiary of Genworth Financial, also put a hold on their IPO plans.
"In light of the recent significant trading volatility in the mortgage insurance (MI) sector, Genworth's Board of Directors determined that current market pricing for the planned offering does not accurately reflect Enact's value. Therefore, we have decided to postpone the IPO and will continue to evaluate our options as market conditions develop," said Tom McInerney, Genworth President and CEO, in a press release.
Hear.com, Zenvia, and Enact plan to trade on Nasdaq.
Filings with the SEC show that Hear.com was seeking to raise about $272 million through the sale of over 16.2 million shares offered at an initial price of $18.50 per share. It would trade on Nasdaq under the ticker symbol “HCG.”
Zenvia was seeking to raise $213 million through sales of over 12.9 million shares priced between $15.50 and $17.50. It will trade on Nasdaq under the ticker symbol “ZENV.”
Enact Holdings wanted to raise about $500 million through the sale of over 22.5 million shares prices between $20 and $24. It will trade on Nasdaq under the ticker symbol “ACT.”
The IPO market is cooling off.
The S&P 500 saw its biggest decline in seven months when it dropped 4 percent earlier this week. It eventually rebounded by 1.2 percent.
According to The Wall Street Journal, the decisions to postpone the offerings are the latest signs of cooling for the U.S. IPO market, which has been hot for nearly a year.
In 2020, the IPO market was hotter than ever, despite the global COVID-19 pandemic. IPOs raised a record $167 billion, according to Dealogic.
However, stocks for companies that went public last year and earlier in 2021 have been struggling.
Cryptocurrency exchange Coinbase (COIN), which went public this past April, is currently trading below its opening price.
Stock prices for cloud-based data storage company Snowflake (SNOW), which broke the record as the largest software IPO ever when it went public last fall, have fallen over 50 percent.
Dating app Bumble (BMBL), which went public in February, also saw its stock price practically cut in half from its high of $84.80 per share.
However, the market volatility has been bad for all 2021 U.S. IPOs. The Wall Street Journal reports that, on average, 2021 IPOs are up 6.4 percent from their initial prices, according to Dealogic data.