In This Article:
Recent IPO debuts from companies such as Instacart (CART), Arm Holdings (ARM), and Birkenstock (BIRK), have not delivered the performance many investors hoped for. University of Florida Professor Jay Ritter and PitchBook U.S. Venture Capital Lead Analyst Kyle Stanford joined Yahoo Finance Live to discuss the IPO market.
“Companies that are coming… with these IPOs are just not finding the interest that they were hoping for,” Stanford says.
Stanford notes that Instacart and Klaviyo (KVYO) “turned profitability, they turned… where they thought investors were looking for and they still have not performed well. So it doesn’t bode well for the rest of... 4Q or even, you know, early 2024.”
“A big issue has been the reset in valuations for growth companies,” Ritter says. Companies like Birkenstock, “which is much more mature, there’s less uncertainty, but there’s still uncertainty about its ability to grow future profits.”
For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.
Video Transcript
JULIE HYMAN: Birkenstock shares sliding once again on the second day of trading after its disappointing public debut. The lackluster performance adding on to an already shaky IPO market. Other recent public debuts like Arm and Instacart have been struggling since their offerings.
Here with more on the path forward for the IPO market is Kyle Stanford, PitchBook US venture capital lead analyst, and University of Florida Professor Jay Ritter, who also keeps a close eye on this market. Guys, thank you so much for being here.
It has been a very interesting couple of months on this front. Kyle, I'll start with you. When you look at, you know-- Birkenstock sort of stood out even more than some of the other lackluster IPOs as of late because of the pricing and then the action. What sort of takeaways do you have from that?
KYLE STANFORD: Yeah, I think in reality, right? When you look at what's happened with the recent IPOs, it has not been the performance that anyone has wanted. There's still a lot of uncertainty in the public markets. You know, obviously, with everything happening in Israel and still in Ukraine and the tensions between China, those are just adding more uncertainty to the market. And these companies that are coming to the-- or with these IPOs are just not finding the interest that they were hoping for.
You know, we track the Instacart's and the Klaviyos much tighter than we look at the Birkenstocks. And those two, right? They turned profitability. They turned kind of where they thought investors were looking for. And they still have not performed well. So it doesn't bode well for the rest of, you know, the rest of 4Q or even early 2024.