Here’s why IPOs have dwindled to nearly zero :: InvestMacro

The IPO market is fading away.

by Elliot Wave International

Financial activity is usually baffled during times of financial optimism, such as the issuance of initial public offerings (IPOs).

An IPO means that the company is moving from private ownership to public ownership. The process involves selling shares to the public for the first time.

As recently as 2021, a address on December 2 said:

A record year for IPOs

The attached article stated that nearly a thousand companies went public last year, easily surpassing the record set in the 1990s.

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As you know, the S&P 500 was still rising throughout 2021.

However, history shows that when the spirited mentality that drives stock prices wanes, the IPO market declines.

In fact, at the beginning of the worst part of the 2007-2009 bear market, May 2008 Elliott wave financial forecastA monthly bulletin providing analysis of key US financial markets said:

Initial public offerings are being canceled at a record rate because “recession fears have sapped demand for new shares”.

Of course, the Great Recession of about 15 years turned out to be the worst economic downturn since the Great Depression of the early 1930s.

Speaking of which, you might be interested to see a chart from Bradstreet’s Weekly when the Business Summary was doing a 1932 review (data up to mid 1932). traditional Elliot Wave NazerA monthly publication providing analysis of financial markets and cultural trends, it republished the chart and said:

Wall Street was in a frenzy in 1929, giving the public what it wanted: More stock. By late 1931, new releases had reached nearly zero.

Now back to the present day: The ‘crazy’ psychology of 2021 drove the S&P 500 to a record high in the first few trading days of 2022. With stock prices plummeting then, in June Elliott wave financial forecast Noted:

The IPO market is fading away. According to Renaissance Capital, of the eight IPOs that began trading in May, only one recorded a gain: Bright Green Corporation, a cannabis company. From its $8 asking price, the shares jumped 625% to $58 on the second trading day, which was May 18. After that, it fell more than 85% and is now trading at $7.89, as we move to squeeze below. its initial presentation.

As of this writing on June 22nd, Bright Green Corporation was trading at $2.77.

Is the stock market slated to repeat the 2007-2009 bear market, or worse, the historic financial downturn from 1929 to 1933?

The Elliott wave pattern for the stock market provides a great clue.

If you want to learn How The Elliott wave model can help you analyze the stock market, we encourage you to read the classic Wall Street book from Frost & Prechter, The Elliott Wave Principle: The Key to Market Behavior. This is a quote from the book:

In the markets, the advance eventually takes the form of five waves of a particular structure. Three of these waves, which have been named 1, 3 and 5, actually affect directional movement. They are separated by two opposite direction interrupts, which are named 2 and 4, as shown in Figure 1-1. The two interruptions seem to be a prerequisite for an overall directional movement to occur.

[R.N.] Elliott pointed out three consistent aspects of the five-wave shape. They are: wave 2 never moves past the start of wave 1; Wave 3 is never the shortest wave; Wave 4 never enters the price zone of wave 1.

Get more ideas about wave theory by reading the full online version of the book Free.

All that is required for free access is a Club EWI membership, which is also free.

Club EWI is the world’s largest Elliott Wave education community, and members have free access to a wealth of Elliott Wave resources in the financial markets, investing and trading.

Just follow the link and you can have the classic Wall Street on your PC screen in moments: The Elliott Wave Principle: The Key to Market Behavior – Free and instant access.

This article was published by Elliott Wave International and was originally published with the headline Here’s Why IPOs Have Dwindled To Near Zero. EWI is the world’s largest market forecasting company. Its staff of full-time analysts led by Certified Market Technician Robert Prechter provides 24-hour market analysis to institutions and private investors around the world.

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