It has been a record-breaking year for IPOs, but it has also been a mixed bag — and billionaire Stephen Schwarzman’s Blackstone Group is among those investors who are picking through their duds.
The private-equity giant has held a significant ownership stake in 10 companies that went public on the New York Stock Exchange or Nasdaq this year, including one business that got sold to a so-called SPAC, or special-purpose acquisition company.
Half of those companies — including the Bumble dating app and the Oatly oat drink brand — are now trading well below their offering prices. Indeed, four of them have fallen more than 30 percent over the past 90 days, including Oatly whose stock has plunged 50 percent, to $8.14 from $16.30, while Bumble has dropped 35 percent during that same period, to $34.87 from $53.50.
That’s in sharp contrast to the S&P 500, which is up 24 percent on the year, and the Nasdaq, which rose 19 percent.
To be sure, the IPO aftermarket has been a disappointment this year across the board. While nearly 1,000 companies went public in 2021 — an unprecedented crop of deals that raised a record $300 billion in proceeds — their stocks were down 20 percent this year versus the S&P 500, according to University of Florida Professor Jay Ritter, who is known as “Mr. IPO” for his work on initial public offerings.
Many newly listed companies, especially in tech and health care, have not grown quickly enough to justify their lofty trailing revenue trading multiples, some of which exceeded 20 times earnings, Ritter said. The Renaissance IPO exchange-traded fund, which tracks recent IPOs, is off 9 percent this year.
“Investors were buying IPOs on a lot of optimistic assumptions,” Ritter told The Post.
Still, Blackstone has left itself open to criticism, especially when listing companies it has invested in through its growth fund.
Oatly, which listed its shares in May, missed earnings forecasts in its most recent quarter. Last month, Oatly revealed in a securities filing that it was forced to conduct a limited recall related to “loose metal items” found in its milk-processing equipment.
Meanwhile, Bumble — founded by tech entrepreneur Whitney Wolfe — posted a decline in overall user growth in its third quarter, with analysts fretting that its pandemic-driven user growth isn’t sustainable. Total paying users dropping to 2.87 million in the three months through September, down from 2.93 million in the prior quarter.
Shortly after its February IPO, Bumble traded as high as $84.80 a share. On Thursday, the dating app closed at $34.87.
Sema4 Holdings, a genetic-testing business spun out of Mount Sinai Health Systems, merged with a blank-check company and started trading in July. Sema4 lost $89 million in operating profit last quarter on $43 million of revenue and also loses money at the gross margin level. Some investors fret that the company may not be able to renew big contracts it won during the pandemic.
“The interesting thing is the root cause of the poor stock price performance in all of these appears to be operational execution, missteps and poor business models, and not market changes,” one IPO investor remarked. “Why are some of these companies public? ”
Sema4 shares in the last 90 days have fallen by more than 40 percent to $4.67.
Blackstone told The Post its 2021 IPOs have delivered “exceptional absolute and relative performance” — calculating that they are up 32 percent on average from when they went public.
That stat, however, includes auto technology company Sona Comstar which listed its shares on the National Stock Exchange of India.
Elsewhere, Blackstone’s biggest winners include Texas-based business process outsourcing company TaskUs, which since its June IPO is up 115 percent. Health company Apria is up 53 percent year to date, and Imago Biosciences is up 45 percent on the year and is still rising.
“Many of these IPOs are high-growth, technology, and life-sciences businesses — with those sectors and many other IPOs seeing similar retracement in the fourth quarter nearly across the board,” a Blackstone spokesman said.
“We also believe these companies are well positioned for long-term success and continue to be substantial stockholders in alignment with their public shareholders.”
More broadly, Blackstone pointed to its “strong track record of helping build many highly successful public companies for the long-term,” citing Hilton, whose IPO investors it said have tripled their money. Blackstone-backed Tradeweb is trading at nearly 4 times its IPO price and Invitation Homes has more than doubled, according to the Blackstone spokesman.