The aging technology unicorns are the subject of IPOs in tough market conditions

(October)

Roku: 18% drop

Okta: 14% decrease

Spotify: down 14%

Eventbrite: down 20%

Source: CNBC

The Renaissance Capital IPO ETF, a basket of companies listed on the stock exchange since last year, also experienced a tumble this month, down 9% from a 3% decline for the S & P 500.

Market volatility undermines investor confidence in IPOs. "IPOs need a cheap deal to make deals, and we do not see it," Kathleen Smith of Renaissance Capital told CNBC.

"Whenever you see volatility in the markets, all bets are open," said Cindi Profaca, who has been following IPOs for more than 20 years on IPOFinancial.com. "We usually see reduced conditions and delayed transactions, so this action is not a surprise."

Smith noted that of nine IPOs planned for the public this week, two were postponed, two at prices below the range and two down.

It's not just the United States. The recent volatility in China has pushed Tencent Music to delay its IPO in the United States, which would have earned the company between $ 25 and $ 30 billion.

This could have consequences for major tech unicorns that might want to become public next year. Venture capitalists have blocked huge sums of money in these unicorns, many of them for more than a decade. They are trying to go out.

The question is what will happen if this volatility continues? Profaca said the technology unicorns will have three choices: "They will have to accept a lower price, or float a smaller number of shares, or postpone the offer indefinitely." What they choose to do depends on the demands of their private investors and the needs of businesses.