The latest technology IPOs are falling, with Robinhood, Rivian, UiPath by over 70%

Rivian electric trucks are parked near the Nasdaq MarketSite building in Times Square on November 10, 2021 in New York City.

Michael M. Santiago Getty Images

Technology stocks became burdened in 2022. The decline was particularly brutal for companies that had their market appearances in 2021.

Of the 53 CNBC-linked companies that went public last year through an IPO or direct listing, all but three are now trading below their bid (for an IPO) or starting price (for a direct listing).

More than half fell by at least 50%. These include some of the most notable names, such as the trading applications Coinbase and Robinhood, electric car maker Rivian, cloud software vendor UiPath and fin-tech companies Marqeta and Toast. They have all lost over 60% of their value.

The sell-off began late last year as rising inflation and concerns about rising interest rates pushed investors out of the riskiest assets with the largest multiples. The decline intensified in February after Russia’s invasion of Ukraine and approached territory in a panicked sale late last week after the market digested Federal Reserve comments and a half-point increase in the reference interest rate.

The Nasdaq fell 4.3% on Monday, closing at its lowest level since November 2020. On Friday, the technology index ended its fifth consecutive weekly decline, its longest streak of losses since 2012.

The IPO is the last thing investors want to touch on at the moment. The market for new releases was dry during the first four or more months of this year, and there is nothing significant in the calendar of technology IPOs during the second quarter.

Companies that intended to go out in the first half of 2022 have no appetite to continue down that path. This is because most of them have raised risky financing based on estimates that reflect where the market has been in recent years, as the technology was at the end of a decade of long growth. Going public today would require a complete revaluation of their business and would leave many investors and employees at a late stage without stocks.

Food delivery company Instacart is the only company in its class to have publicly taken its lumps. In March, the company said it had reduced its estimate by about 40% to $ 24 billion, a move that allows Instacart to tell employees and recruits that upcoming stock awards will be issued at a lower price.

But even that reduction may not fully reflect how much investor sentiment has deteriorated in the part of the technology market that has been the top flyer for so long.

The Renaissance IPO ETF, which tracks about 100 companies that have gone public in recent years, is nearly 60% lower than its 52-week high. The index fell 9.7 percent on Monday, leading to a 19 percent drop in May.

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