Business software maker Justworks Inc. postponed its initial public offering Wednesday, a day before its planned Nasdaq debut, as newcomers and tech stocks recently have faced a bumpy reception from investors.
“Justworks has decided to delay its IPO due to market conditions at this time,” the company said in an email.
The cloud-based software platform was set to debut on the Nasdaq Thursday under the ticker symbol JW. Last week, the company said it expected to price its offering from $29 to $32 per share, which would have raised up to $224 million for the New York City-based company.
At the high end of the range, Justworks would have been valued at roughly $2 billion.
Justworks provides small and medium-size businesses a central platform to access benefits, payroll, human resources and compliance support. It has more than 8,000 customers across the country, according to a filing with the Securities and Exchange Commission.
The company had total revenue of $982.7 million and $742.4 million for the fiscal years ended May 31, in 2021 and 2020, respectively. It had a gross profit of $106.1 million and $77.1 million, respectively, during the same periods.
Tech stocks overall have struggled so far this year. For example, the Nasdaq-100 Technology Sector Index is down 4.3% so far this year. By comparison the S&P 500 is down 0.9%.
The year 2021 saw a record for IPOs but the tide has started to shift for startups. As 2021 drew to a close, nearly two out of three companies that went public that year were trading below their IPO price.
Central banks have signaled they would raise interest rates to curb inflation, which may cool interest in riskier assets. Another headwind is the deluge of IPOs entering the market.
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