Compared with last year, the flow of Bay Area companies heading to Wall Street has slowed to a trickle.
Thus far this year, only two local companies have gone public. Over the next two weeks, just three more are poised to join them on Wall Street. All told, only 16 Bay Area companies total have either definitely or reportedly started to queue up to go public at some point this year.
That pace stands in sharp contrast with last year, which saw a record number of local companies – 95 — head to Wall Street.
The slowdown may have a lot to do with how those newly public companies have performed. At the end of last week, the shares of nearly 90% of them were trading below their debut prices.
Also likely playing a role: the downturn in the public markets overall. The Dow Jones Industrial Average, the Nasdaq and the S&P 500 are all trading well off for the year to date.
Those factors have combined to create a bear market for IPOs, William Smith, CEO of Renaissance Capital, in an email newsletter this weekend.
"Everything is getting dumped: Investors are taking profits on their winners and cutting loose the losers," said Smith, whose firm manages an index fund comprised of stocks that have recently gone public.
The two Bay Area companies that have gone public so far are private equity firm TPG Inc. and hospitality technology business Sonder Holdings Inc. Meanwhile, the three companies closest to a Wall Street launch are:
- Credo Technology Group Holding Ltd.: The San Jose-based provider of networking chips is expected to begin trading Thursday.
- Knightscope Inc.: The Mountain View developer of security robots is lined up to have its shares start trading the same day.
- Quanergy Systems Inc.: The Sunnyvale-based lidar maker expects to go public next week via a merger with CITIC Capital Acquisition Corp., a blank-check company.
You can find details about all of the 16 Bay Area companies that are beating a path to Wall Street in the photo gallery above.
They likely won't be the only local companies going public this year. Others are expected to head to Wall Street but haven't yet taken any official steps in that direction. They include San Francisco companies Stripe Inc., a payments technology provider; Discord Inc., an online chat provider; delivery company Instacart; and Databricks Inc., an enterprise software provider. Impossible Foods Inc., the Redwood City-based provider of meat alternatives, is also said to be waiting in the wings.
So far, the first two Bay Area companies that went public in 2022 have not wowed investors.
The stock for TPG (Nasdaq:TPG), which has dual headquarters in San Francisco and Texas, jumped by about 15% on its first day of trading after it raised more than $1 billion in an IPO. But it has since given up those gains and entered Monday with its stock priced about 2% below where it went public.
And Sonder, which raised $310 million last week when it became the first company from the region this year to go public in a blank-check merger, has seen its shares fall 18% since its debut.
