Amazon-backed restaurant-meal delivery service Deliveroo on Monday downgraded the pricing expectations for its London IPO, showing just how much market conditions have changed. Just a few months ago, investors were tripping over themselves in their rush to buy into IPOs. In December, the offering of DoorDash, the U.S. equivalent of Deliveroo, priced about 28% above what the company initially projected. And when the stock began trading, it soared 85% above the IPO level.
Since then, of course, the market has become more jittery, thanks to rising interest rates. The Nasdaq has lost ground. DoorDash stock has fallen 40% from its highs, as have other stocks that recently went public. Adding to the nerves in the past few days has been the widely publicized troubles of investment firm Archegos, which has caused turbulence in tech and media names, such as ViacomCBS and Baidu, as well as the banks that did business with the fund. This is the kind of episode that can trigger a broader sell-off in a market as frothy as this one has been, although so far the damage appears to be contained.