The 'Great IPO Reopening' may be on hold: rising rates and weaker stocks are a killer

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The Great IPO Reopening may be on hold: rising rates and lower stocks are an IPO killer. 

A combination of still-high valuations, a mediocre reception for the latest crop of IPOs and poor market conditions may force The Great IPO Reopening to be put on hold. 

Instacart on Thursday broke below its initial price of $30 before closing at $30.65. Arm Holdings yesterday broke below its initial price of $51 before closing at $52. Klaviyo hit $31.30 when it opened on Thursday, barely above its initial price of $30, before closing at almost $34. 

And what about the earlier crop of IPOs? Not so good. 

Restaurant chain Cava was the first IPO to get everyone excited, way back in June. It priced at $22, opened at $42, and went to $55 shortly after. It's now at $30, still above its initial price the victim of massive selling the past two weeks. 

Kenvue, the Johnson & Johnson spinoff, went public in May at $22, traded in the high $20s for a couple months, and has now broken below its initial price of $22. 

Cosmetics firm Oddity Tech priced at $35 in July, opened around $49, and is now $28, well below its $32 initial price. 

Throw in the seasonal weakness and macroeconomic worries, particularly higher interest rates, and it's likely many executives of IPO hopefuls who are looking to go public in October or November are chewing their fingernails.

Unfortunately, the alternatives are not very appealing. 

The good news: deals are getting done. 

The bad news: these early companies are the strong ones, and their mediocre reception, even with tiny floats, does not bode well for the hundreds of tech IPO hopefuls, most of whom are not profitable and would still like to avoid taking the massive haircuts that would be necessary to