Bloomberg: IPOX® Founder Josef Schuster Comments on Weak U.S. IPO Debuts and Rising Equity Risk

Bloomberg reports that Jersey Mike’s Subs Inc. and Reformation Inc. delivered underwhelming first-day trading performances despite strong demand for their shares. Jersey Mike’s fell 6% in its debut, while Reformation closed just 0.5% higher, adding to concerns about investor risk appetite and the condition of the U.S. IPO market.

The article cites the IPOX® 100 U.S. as the benchmark for recent large U.S. IPOs and spinoffs. The index was down 13% in the third quarter at the time of publication, underperforming both the S&P 500 and Nasdaq 100. Bloomberg noted that weakness following the SpaceX IPO also weighed on the IPOX® benchmark.

IPOX® Founder and CEO Josef Schuster provided analysis on the challenging market environment and the implications for prospective issuers:

“Equity risk is just through the roof and that is pressuring the IPO market as well.”

“The market is going to be more selective going forward than it has been and companies are going to need to be more flexible about their pricing expectations and maybe the amounts they raise.”

Read the full article by Anthony Hughes on the Bloomberg Terminal: Jersey Mike’s, Reformation Leave IPO Market in a Rut: ECM Watch