A year that began with high hopes for a tech IPO revival has crashed into a wall of reality following sputtering public offerings from Snap and Blue Apron.
The catastrophe that is Blue Apron was driven home in recent days thanks to multiple shareholder lawsuits claiming management misled investors. Less than two months after its initial public offering, Blue Apron’s stock has been hovering at around half of its IPO price.
Snap, with the biggest tech IPO in years, has fallen below its initial price of $17 per share over concerns that Facebook is suffocating its growth. This hasn’t been helped by two earnings reports confirming investors’ fears that management may not have any good plan to get the company growing fast enough to justify its valuation. The stock has regained some lost ground in recent days, but it has remained under its IPO price since mid-July.
While it would be overstating things to say Snap and Blue Apron have killed the tech IPO market, they’ve certainly put a damper on it. Just two months ago, following the Snap IPO, Quartz crowed: “The tech IPO window is wide open, and Silicon Valley is rushing to cash in.”
That euphoria proved short-lived. According to Renaissance Capital, there have been 16 tech IPOs so far this year. The total for 2017 could still conceivably top the 29 in 2016. But that’s not saying much, because 2016 was a historically low moment for tech IPOs, according to Kathleen Smith, a principal at Renaissance Capital and manager…