As predicted by many experts, the IPO market has been extremely lackluster this year, for a variety of reasons. One of the most glaring of these reasons has been regulatory uncertainty in U.S. politics, due to the disruptive presidency.
Economic policy in the U.S. is at an odd standstill, halted by partisanship in Washington D.C. With the recent failure of Healthcare reform, tax reform does not look hopeful, as with many other pro business policies discussed by the Trump administration.
Snapchat was poised to be the large IPO of 2017, but has proven to be a disappointment. Share prices have corrected to around $14-15, from its $24 opening price. Snapchat's definitive feature, the story, was quickly adopted by Facebook, as well as in their Instagram platform.
Facebook's ability to easily take this idea and reach a larger amount of daily active users in such a short span of time has driven valuations down. Another interesting IPO, Blue Apron, has suffered a similar fate.
The meal-kit startup recently took a big hit to its valuation, reducing their IPO expectations from $15 to $10. As of this article, the share price is $6.50. Much of this reasoning is that people have realized how easily Amazon could negate this business model with its recent acquisition of Whole Foods.
Whole Foods' best performing business segment is their Hot Food bar, which specializes in serving hot and ready meals. Amazon could easily collaborate with this segment for a similarly priced meal kit delivery service that already reaches the target demographic of Blue Apron using the marketing value of the Whole Foods name.
The challenges presented to IPO's in 2017 will serve to deter future IPO candidates. Uber was once a highly valued prospect, that has recently suffered major setbacks that will delay any hopes for an IPO for the foreseeable future. Problems with company culture, a departing CEO, and a number of higher up employees will ensure that Uber has a long way to mature, and will not be ready for public ownership for at least a year.
The lessons learned by investors in these IPO's, can be similarly applied to the crypto market. Businesses, or coins, with solid fundamentals and use cases that are unique will outperform even among negative news and bearishness. Stick to your fundamentals, and stay down to come up!