Ever since the U.S. got a credit downgrade in August, the stock markets have been bouncing up and down like a pinball. At this point, the volatility has persisted long enough to raise concerns that this year's healthy crop of planned initial public offerings could go into a holding pattern or even fade away.
This would be bad news for companies seeking venture capital, too. No IPO paydays means less cash in venture capitalists's pockets to reinvest in your business.
Market uncertainty makes companies cancel or postpone IPOs, as investors don't want to end up with poor returns. The timing of the current market craziness is crummy, as 202 companies have filed to go public so far this year and are considered "in the pipeline," IPO analyst firm Renaissance Capital reports. That's the most companies waiting in the IPO wings in a decade.
So companies have finally gotten up the gumption to try the public markets again. And now this.
Crucial stuff. We need to keep an eye on how this IPO pipeline pans out over the next 6 months.