Reference no: EM133234104

The IPO market is on pace for its worst year in decades, leaving fledgling companies with few options but to burn through cash while they wait for the stock market to calm. Late last year, hundreds of companies were in the final stages of preparing to go public, encouraged by the best 18 months ever for U.S. initial public offerings. Then a combination of factors-sky-high inflation, rising interest rates and Russia's invasion of Ukraine-sent shock waves through the stock market. The IPO pipeline froze. So far this year, traditional IPOs have raised only $5.1 billion all told versus historical levels of around $33 billion at this point in the year, according to Dealogic data that goes back to 1995. (please refer to the article" IPO Market Faces Worst Year in Two Decades. 'Really Hard Pill to Swallow")

Why do you think the author views fewer companies going public as bad news for the economy and investors? Given the lack of a market currently for IPOs, how are start-ups that had been planning to go public adopting? Discuss the factors that have negatively impacted the IPO market.