After Deliveroo’s London Debacle: Is The IPO Market Showing Signs Of A Cooldown?


After the highly anticipated IPO of the UK-based Deliveroo (LSE: ROO) turned into a debacle, with shares plunging over 26% on the first day trading, appetite for new public offerings may be diminishing.


Deliveroo’s IPO has turned into a debacle for the London Stock Exchange in its biggest offering in over 10 years. Reasons for this primarily lie in the cautiousness of institutional investors surrounding the sustainability of working practices of the Amazon-backed food delivery company.


Thursday’s IPOs of the online real-estate brokerage Compass (NASDAQ: COMP) and budget airline Frontier Group Holdings (NASDAQ: ULCC) underscore this case. While Compass is trading higher after trimming the size of it’s offering by half, Frontier is trading below its $19 IPO price.


Tom Taulli, author and IPO analyst, commented that “we are seeing more rationality come into the market which has probably been overdue”, noting that good deals will still get done, using the example of Coursera’s (NYSE:COUR) 36% gain in its yesterday debut, while bad ones are being punished.