IPO market remains dormant as Justworks and Fresh Market withdraw their filings

A man checks his phone on Wall Street near the New York Stock Exchange (NYSE) in New York, May 27, 2022.

Angela Weiss | AFP | Getty Images

The IPO market has been frozen for most of 2022 and shows no signs of reopening.

Wednesday Software Provider Justworks and grocery retailer fresh market withdrew their IPO applications. Both companies originally announced plans to go public last year. AT short documents with the SEC, they have stated that they no longer plan to sell shares without giving reasons.

They have nothing to explain. After significant years in 2020 and 2021, including a record level of activity last year, investors are not showing interest in new issues amid a market decline this year. The tech Nasdaq is down 28% in 2022, trailing the S&P 500 which is down 20%.

The picture is much bleaker for companies that have entered the market recently, especially in and around the tech sector. Renaissance IPO ETFwhich says it tracks “the largest and most liquid recently listed U.S. IPOs” fell 46%.

According to Ernst & Youngglobal IPO volume fell 54% in the second quarter year-over-year, while IPO revenue fell 65%.

Technology stocks and new IPOs this year

CNBC

New York-based Justworks was about to go public after income in the 12 months ending last May rose 32% to nearly $983 million. The company even recorded a net profit, which is rare for software companies preparing for an IPO.

Looking at what’s going on with Justworks’ competitors, it’s clear why the company has been avoiding an IPO for the time being. paycom down 26% this year, Paylocity decreased by 24% and Paychex fell by 15%.

Fresh Market, which has 159 stores in 22 states and also sells a wide range of food kits, has brought in $1.4 billion a year. income during the first three quarters of 2021, up 3.5% from the previous year. The company names traditional supermarkets such as Albertsons’ and krogerspecialty grocers such as Sprouts Farmers Market and Trader Joe’s as well as big box stores such as walmart as well as Target.

In May, Fresh Market said it was selling 67% of Cencosud, a South American retailer, for $676 million. The rest will be held by existing shareholders, including Apollo Funds, which privatized the company in 2016.

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