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Investors are getting more comprehensive and timely data on the valuations of private companies, thanks to the rise of marketplaces to trade shares. According to the latest report from Forge Global, the average price of companies trading on the platform dropped 8.9 percent between the last quarter of 2021 and the first quarter of 2022. Meanwhile, the price of newly-listed companies measured in the Renaissance IPO Index plunged 31.2 percent as the public markets sustained substantial price corrections in the past few months.
Driving the news: Forge Global, which operates a private stock marketplace, reports a record amount of sell-side interest and a significant decline in trading valuations.
PODCAST: Barron's associate editor for technology Eric Savitz speaks with Kelly Rodriques, CEO of Forge Global, they will take a close look at the state of the market for venture capital investments.
The market for public debuts has gone ice-cold in the month of March. But this week, Forge Global bucked the trend. The startup completed its blank-check merger on Tuesday, and its shares got off to a crackerjack start, rising as much as 143%. The stock settled down as the week progressed for a more modest 13% gain.
“In recent months, as volatility hit the public markets, we’ve seen more shareholder activity on the platform as employees and early investors are concerned about extended liquidity timelines. Later stage investors sense buying opportunities because they tend to be more long-term, focused on the next three to five years and not the next three to five Fed meetings,” reported Forge.
"The range of ways to go public has changed forever," said Kelly Rodriques, CEO of Forge, a company that lets people sell shares of private companies. "There is more flexibility now with direct listings and SPACs."
