Tech SPACs have been just as problematic for public investors as IPOs and direct listings. Shares of each are down between 20% and 50% from their highs, but employees have had the ability to sell their vested stock on the open market from day one, cashing in on at least some of their gains. This year, Roblox, Coinbase, Squarespace, ZipRecruiter, Amplitude and Warby Parker debuted via direct listings. Prior to 2021, only four notable companies - Spotify, Slack, Palantir and Asana - had chosen that path to the public market. While still used by a small minority of venture-backed companies, direct listings gained significant traction this year. tech companies this year went public through a direct listing, allowing existing investors to sell right away rather than adding cash to their balance sheets. GitLab reported better-than-expected revenue in its first quarter as a public company, but that didn't seem to matter.įor some newly public companies, lock-ups aren't an issue. The news worsened for GitLab employees on Monday, when the stock sank an additional 9% in extended trading, leaving it just above its IPO price.
Coinbase, Didi, UiPath and Robinhood are the four that have fallen below their initial prices.Ĭloud software vendor GitLab, down 35% from its November peak, is also scheduled to hit its lock-up expiration in early 2022. this year, six are still above either their IPO price or, in the case of direct listings, their first trade. Of the 10 most valuable tech companies to go public in the U.S. Rivian is still trading well above its $78 IPO price, but the recent plunge has pulled Freshworks under its offer price. In investors' flight to safety, the people being hit the hardest are employees and other insiders at the companies that haven't yet made it through their post-IPO lock-up period, which typically lasts until six months after the offering.
The index's top holdings are Moderna, Uber, Snowflake and Zoom.Īcross the tech sector, rising inflation and the threat of higher interest rates are battering companies that will require additional outside capital to subsidize growth.
The Renaissance IPO ETF, which tracks stocks of companies to go public in recent years, has fallen 18% in the past three weeks and is down 26% from its record in February. Investors choosing a basket of offerings in the hope of building a diversified portfolio haven't found any safe havens.
Ten of those companies have slid by at least that much in just the last week.Įven worse, 23 of those companies have lost half or more of their value since reaching their highs, including Robinhood, which has plummeted 74% from its top in early August, and LegalZoom, which has plunged 58% since peaking in July. That means the rest are in bear market territory, typically defined as a drop of 20% or more from their peak.