The 2022 IPO market fell far short of expectations. A large number of IPOs were delayed, coupled with concerns about economic recession and high inflation, the market capitalization of global stock exchanges almost evaporated by tens of billions of dollars. Therefore, it can be said that high inflation and widespread geopolitical instability have caused the number of global IPOs to drop by approximately 50%, as companies face growing market uncertainty. What impact did 2022 have on the IPO market? Some economists believe this is the most chaotic moment in the history of the U.S. economy. Although the U.S. added 261,000 jobs in October this year and recruitment remained strong, high inflation has caused the revenue of a large number of companies to plummet to dangerous depths. The IPO market may have been hit the hardest. Many companies are scrambling to re-evaluate their valuations and further delay their scheduled IPOs. It is reported that Instacart, the U.S. fresh food e-commerce giant, has adjusted its valuation three times this year in preparation for its IPO. The IPO fundraising amount of SPACs in the third quarter of 2022 was the lowest since the third quarter of 2016. According to statistics, in the first quarter of 2022, there were only 77 IPOs (including SPACs) in the U.S. market, raising $12.2 billion, while in the first quarter of 2021, there were 395 IPOs that raised $140 billion. As global stock prices fell due to rising global volatility and inflation, major economies and financial markets have felt the pressure. The combined impact of these variables has made it difficult for risk assets to make progress in the economy. According to IPO research firm Renaissance Capital, this was the slowest October for the IPO market since 2011. Companies that went public in 2021 suffered the biggest losses, with most trading at less than half their IPO offer prices. Uncertainty surrounding Federal Reserve policy has forced companies to scale back and put IPO plans on hold. Technology layoffs have dominated most of 2022, as companies restructure and reorganize to navigate the seemingly inflationary landscape of 2023, with the threat of a recession looming large. In the U.S., as companies re-evaluate their growth strategies and profit forecasts, most upcoming IPOs have been put on hold until the market reopens next year. 2023 Inflation and Initial Public Offerings SP Global reported that total IPO fundraising in the third quarter of 2022 was $45.6 billion, down from $118.24 billion in the same period in 2021. While private companies have more leeway in how they operate, listed companies must comply with established requirements and regulations set by the U.S. Securities and Exchange Commission (SEC) and regularly report their financial results, and the financing capacity of IPOs is undoubtedly more attractive. Vigilant about volatile markets and additional costs, most companies have postponed their so-called blockbuster IPOs to evaluate their options in 2023. Although the public offering dates have been delayed, economists believe that underlying activity remains strong. Most companies are taking this opportunity to monitor the market and prepare to adjust their valuations when needed. However, investors have warned not to expect the exciting IPOs of 2021 to repeat. It is no secret that Wall Street is risk-averse, and investors have shifted to lower-risk assets this quarter. The threat of a possible recession has not helped matters, instead pushing companies to wait more firmly for the market downturn to end rather than risk being plagued by an unstable economy. Of course, inflation in 2023 may also derail plans, so even tech companies in need of capital have been extremely cautious. Most tech stocks have fallen by more than 50% this year, and the Federal Reserve's interest rate hikes have severely hindered the credit market. Analysts believe that once the market reopens and inflation can be brought under control, the recovery of the IPO market will once again remain attractive. © 2021 Meishun (Hong Kong) Management Consulting Co., Ltd. and Meishun (Hangzhou) Management Consulting Co., Ltd. All rights reserved. Meishun Meiyin (Hangzhou) Consulting & Management Co., Ltd. is a domestic subsidiary of Hong Kong Meishun Management Consulting Co., Ltd. under the same ultimate beneficial owner. Both companies share the same ultimate beneficial owner and are under the same China-based management, and both comply with the laws of Hong Kong and mainland China.