This year has been a very rough one on the international trade markets and the markets have been very volatile with companies and investors both withdrawing capital from the listings and new listings i.e. the IPOs (Initial Public Offering) are suffering from huge losses or drop in their stock prices.
The investors have been shying away from the IPOs this year which is a result of the stock prices drop in the evergreen stocks like Apple Inc., S&P 500 and to some extent even Berkshire Hathaway of Warren Buffet. 2019 is proving to be a record year for U.S. venture capital investment – with $55 billion raised through the first half – well above the mid-point for 2018, which ultimately saw $116 billion raised – close to the record $120 billion raised in 2000, according to the PWC MoneyTree Report. But will that flood of VC money keep pouring in if the companies disappoint investors after they go public? That disappointment must be growing. shares of technology start-ups and other companies that went public in the U.S. this year are trading roughly 5% above, on average, their prices at their initial public offerings, well short of the 18% gain in the S&P 500 index, reported the Wall Street Journal. These relatively low gains in the IPOs are mostly due to the China-United States trade war which has affected the global markets massively.
Not all of the 158 companies which have raised $53.1 billion on U.S. exchanges this year are poor performers. What makes the difference between Uber and Lyft, which have punished investors who bought into their IPOs by falling 29% and 50%, respectively and the winners like Pinterest and Zoom Video which have risen 11% and 23%, respectively, since their IPOs is the market approach towards these IPOs.