Because going public is such a time-consuming and expensive endeavor, many companies are opting to stay private instead. From 2020 to the end of 2021, the markets became frothy, and the markets reacted with spiking interest in special purpose acquisition companies.
According to Nasdaq, there were 613 SPAC listings in 2021, raising $145 billion in total, which is “91% over the amount raised in 2020.” MORE FROMFORBES ADVISOR Best Travel Insurance Companies ByAmy DaniseEditor Best Covid-19 Travel Insurance Plans ByAmy DaniseEditor Furthermore, the volatility and uncertainty of the stock market have made some companies hesitant to go public.
The unpredictability of the market can make it difficult for companies to successfully navigate an IPO. The decline in IPOs has also been exacerbated by a lack of blockbuster offerings.
Despite a drop in the number of deals and capital raised, the public markets remain a key source of funding for many companies.
Silicon Valley is facing steep pressure to raise capital, unlike the heydays of 2015 to 2021; however, some experts predict that the IPO market will recover in 2023 as companies continue to see the advantages of going public.
With the ongoing economic uncertainty and volatility caused by the Covid-19 pandemic, many companies may choose to delay their IPOs or opt for alternative fundraising methods.
As more companies opt for alternative ways to raise capital, the public markets will need to adapt to remain relevant.
Link: https://www.forbes.com/sites/forbesbusinesscouncil/2023/02/01/the-current-ipo-market-factors-in-its-decline-and-reversing-the-trend/?sh=f0318d82c31a