(Bloomberg) -- Despite having a reputation of being lackluster, investors may look back more fondly at the 2023 class of initial public offerings for a rare attribute among recent debutants — not losing them money.

Companies which raised more than $500 million in IPOs this year have gained an uninspiring 2.1%, according to data compiled by Bloomberg. By contrast, firms that went public in 2020 and 2021, at the peak of the market and at lofty valuations, are on average trading 30% below their IPO prices, with three quarters of them underwater, the data show. That’s despite a market rally this year lifting the S&P 500 index 20%.

The reputation set in the first day or first week of trading after a listing tends to stick. Still, investors are tempering their initial judgments on early trading as the year-end approaches and the industry reflects on IPOs such as the year’s largest, Arm Holdings Plc’s $5.2 billion deal — which dipped below its offer price in its debut month, and was up 27% as of Monday’s close. 

“To be clear, the trading of those IPOs have not been terrible — we simply hit this end-of-the-year phenomenon,” said Alex Wellins, co-founder of Blueshirt Group, which advises technology companies on their public listing plans. 

Birkenstock Holding Plc, which raised about $1.5 billion, broke through its $46 IPO price at the end of November and has been trading above it since; and Klaviyo Inc. is hovering around its $30 offer price. Instacart, however, is still trading nearly 19% below the mark.

Close to 160 companies listed on US exchanges this year, raising $25.4 billion, data compiled by Bloomberg show. Almost three-quarters raised less than $100 million, and only seven raised more than $500 million.

The 2021 class, on the other hand, saw a record number of listing candidates and a much more varied group, in terms of industry and size. About 1,100 companies went public in a year that saw a combined $337.4 billion in IPO volume. But as a vintage, 2021 is notorious for being the best as well as being the worst, as only 18 of the 91 IPOs above the $500 million threshold have surpassed their respective offer prices.

Electric car maker Rivian Automotive Inc. lost almost 76%, while Bumble Inc., which climbed as much as 85% on its first day of trading in February 2021, is now 67% below its offer price, according to Bloomberg calculations. 

There are a few bright spots: Language learning app Duolingo Inc. bucked the downward trend and has more than doubled its $102 IPO price, and infrastructure product distributor Core & Main Inc. has gained about 90% since its listing in July that year.

For some investors such as hedge funds that are often looking for quick gains from IPOs, early trading days set the tone. Blueshirt’s Wellins said Birkenstock’s almost 13% slump on its first day of trading in October added frost to the already somewhat chilly reception for Arm, Instacart and Klaviyo. 

“At that point investors really just threw up their hands and said, ‘Hey, we’re shutting the books on the year. We’re not going to take a chance on IPOs’,” according to Wellins. 

“IPOs are highly sensitive to market sentiment. This is largely because the stocks themselves don’t have much of a trading history,” said Matt Kennedy, senior strategist with Renaissance Capital.

“New listings are the first to be dumped during a selloff, but they also make a stronger comeback during a rally,” Kennedy said. “When investors are optimistic about growth and looking for oversold stocks, IPOs are a natural place to look.” 

Barring market upheaval in December and January, Wellins sees the potential for US IPOs to start coming back as soon as the first quarter.

“There are at least 50 companies that are essentially ready to go,” Wellins said.

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