Failed Expectations: The 10 Worst IPOs of 2021

The recovery of the economy after the corona crisis had a positive impact on the stock market. According to an analytical report by Ernst & Young, 2,388 companies have listed shares on stock exchanges around the world this year. The historical record came true in part due to the popularity of the SPAC. Overall, through the listing, market participants managed to attract more than $453 billion of investments, which is 67% more than the previous year and 100% more than in 2019.

Nasdaq is recognized as the most popular exchange for IPOs, and the main areas of activity for newcomers to the stock market are in the technology and consumer sectors, as well as the electric vehicle industry (Rivian, Lucid Group, All Birds, Warby Parker).

outsiders

The United States has become the leader this year in terms of the number of listings: the participation of Americans is more than 900 companies. However, not all of them managed to successfully enter the stock market. We bring to your attention the 10 most failed IPOs of the past year by companies with a capitalization of more than $1 billion.

poshmark

  • Stock code: POSH
  • % drop in share price since IPO: 82%
  • Capitalization: $1.4 billion

Poshmark is a developer of a social trading platform where each member can buy, sell and share design solutions with other users.

The share price in the initial public offering was set at $97.5, but fell to $85 on the first day of trading. Throughout the year, the negative trend remained unchanged, and as of December 21, 2021, the company’s stock was trading in the region of $17.

mixing laboratories

  • Stock code: BLND
  • % drop in share price since IPO: 63%
  • Capitalization: $1.7 billion

The developer of a platform focused on mortgage loans ensures the interaction of borrowers and lenders.

Change in value of Blend Labs Inc shares during 2021. One source – markets/Business Well-informed person

At the time of listing, Blend Labs shares started trading at $20 and traded in the $14-16 region from July to November. This was followed by a sharp collapse in quotes, and by the end of December 2021, its price was only $7.70.

innovative holding company

  • Stock ticker: INNV
  • % drop in share price since IPO: 65%
  • Capitalization: $1.1 billion

The company is dedicated to creating a complete range of services for the care of elderly clients at home.

Change in the value of InnovAge Holding Corp shares during 2021. One source – markets/Business Well-informed person

Since listing, the company’s shares have depreciated 65%: its price has dropped from $24 to $8.50.

Risky

  • Stock code: RSKD
  • % drop in share price since IPO: 72%
  • Capitalization: $1.3 billion

The company offers comprehensive services for the development and implementation of electronic commerce technologies for corporate clients.

Change in the value of Riskfield shares during 2021. One source – markets/Business Well-informed person

The company went public at a price of $27 per share. A month and a half later, its price jumped to $37. However, such a promising start did not continue: the Central Bank began to lose value considerably. As of December 21, 2021, they were trading in a range around $8.

missfresh limited

  • Stock code: MF
  • % drop in share price since IPO: 56%
  • Capitalization: $1.1 billion

Developer of an e-commerce platform for the sale of fresh food products.

Missfresh Ltd share price change during 2021. One source – markets/Business inside

The company started on the stock market with a price of $10.50 per share. On December 21, the value of the securities fell to $4.20.

CredirDepot (Loan Deposit)

  • Stock code: LDI
  • % drop in share price since IPO: 79%
  • Capitalization: $1.4 billion

The company specializes in retail mortgage lending, providing loans for home purchase, refinancing and personal needs throughout the United States.

Credit Depot Inc Stock Value Change During 2021. Source – Business View

At the time of listing, the value of the company’s shares was $14, but by the end of the year it had fallen to $4.50.

RLX technology

  • Stock code: RLX
  • % drop in share price since IPO: 87%
  • Capitalization: $5 billion

Develops and supplies equipment for corporate customer data centers. In 2005, it was acquired by Hewlett-Packard and separated into a separate structural unit.

RLX Technology Inc stock price change during 2021. Source: Yahoo Finance

In January, the company’s securities were opened for trading at a price of $22.50. On December 21, 2021, the share price fell below $4.

Yours

  • Stock key: YOURS
  • % drop in share price since IPO: 78%
  • Capitalization: $3.5 billion

Chinese provider of IoT infrastructure solutions. Helps clients develop and commercialize IoT applications.

Change in the value of Tuya Inc shares during 2021. Source: Yahoo Finance

At the time of listing, the value of the company’s shares was $23, but at the end of the year it was reduced to $5.50.

Oscar Health

  • Stock code: OSKR
  • % drop in share price since IPO: 78%
  • Capitalization: $1.8 billion

The company operates in the field of health insurance using telemedicine and other technologies from the field of digital health.

Change in the value of Oscar Health Inc shares during 2021. Source: Yahoo Finance

Oscar Health entered the stock market at $36. On December 21, 2021, your cost is reduced to $8.

Brilliant Health Group

  • Stock ticker: BHG
  • % drop in share price since IPO: 78%
  • Capitalization: $2.4 billion

Software developer for quality patient care and their interaction with healthcare providers.

Change in value of shares of Bright Health Group Inc during 2021. One source – markets/Business

At the time of listing, the value of the company’s shares was $17, but by the end of the year it had fallen to $3.50.

According to E&Y experts, several key factors prevented the companies mentioned above from gaining a foothold in the stock market:

  • the downturn in the economy caused by another wave of covid restrictions;
  • a sharp rise in inflation in the US;
  • the stimulus measures taken by the government this fall will only take effect in a few months;
  • presence of strong competitors.

What awaits the stock market in 2022?

Analysts at Ernst & Young are confident that newcomers deciding to go public in 2022 will need to consider a number of factors when choosing the right time to go public:

  • high volatility of the market in general;
  • tightening rules for Chinese companies due to the escalation of the trade war between the US and China;
  • Investors’ attention will focus on companies that declare care for the environment;
  • representatives of the technology sector have the greatest growth prospects;
  • an increase in the number of unicorns is expected;
  • Businesses have the highest chance of success. from cybersecurity, health, consumer electronics, electric vehicles, manufacturers of heating systems and water treatment.

In general, analysts advise companies to develop a flexible listing strategy before going public in 2022 and to be prepared to adapt it to rapidly changing market conditions.

Sources: E&Y, Business Insider, Yahoo Finance

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