Small start-ups IPO funding hit by government shutdown

January  13, 2019 | Investopaper

Start-ups companies who were planning to go public in 2019 has been hit by the longest government shutdown in US history. This is because Securities and Exchange Commission has been closed for 22 days and counting and  IPOs must be approved by this federal government agency.

Small start-ups which did not get money from Softbank or $100 billion world funds need IPO for capital fundraising. Those companies who were planning to go public in the first quarter have to postpone their idea due to the stuck application in the government side. Those companies will have to look for other financing options for the capital requirement or cut back operations.

Companies like Airbnb, Uber, Pinterest etc. are all interested for IPO issuance this year. For the first quarter, the IPO calendar is likely to look empty. January has always been one of the busiest months for IPO in the past years. This is expected to bring a knock on effect on other factors.

On the other hand, the government shutdown has also been a sigh of relief for companies who were anxious to issue their IPO in the volatile market where the mindset of the investors have been affected by a trade war, economic slowdown and the shutdown itself.

The government shutdown has not come to an end since Trump administration has remained adamant in their Mexican wall funding demand of $2.5 billion which has been considered ineffective and wasteful by the Democrats.



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