Most Pandemic FinTech IPOs Now Trade as ‘Busted’

Along with everything else, war brings uncertainty to stock markets.

That might seem a bit of a trite sentiment when blood is being spilled. But it’s true, nonetheless.

As the world watches war unfold in Ukraine, the last several days since our inaugural FinTech IPO Tracker have been volatile, to say the least. Among the most volatile sectors have been technology and financial services. To that end, the PYMNTS FinTech IPO Tracker, which meets at the intersection of finance and tech, has underperformed broader indexes.

Through Feb. 23, the overall IPO index reading stands at a bit more than 66, well off lifetime highs of more than 171, reflecting the double-digit percentage point declines in several stocks so far this year.

In fact, the average return among the 46 companies that we track, as measured since their IPO, has been a bit more than -27%. That means that a vast majority of FinTechs that have debuted on markets since the pandemic took root … are busted IPOs.

In fact, among the whole roster, we find only a half-dozen names that are in the black. And some outsized gains (as measured in percentage points) are helping to skew the total average performance upward a bit.

See also: Game Changers of Financial Services Could Be In For Volatile Ride

Among the gainers, we see that Bill.com has had a more than 480% return since its late 2019 IPO. Upstart, which went public at the end of 2020, is up 281% since its debut. Futu Holdings has gained 158% since starting to trade in the first quarter of 2019. There’s no single trend that unites these firms, where Bill.com, of course, focuses on invoicing and accounting functionality, Futu makes its niche with online investing and trading. Upstart is an artificial intelligence lending platform.

Upstart’s surge has been given a tailwind by a strong earnings report earlier this month. The most recent quarter was the first in the company’s history with more than $4 billion in loan transactions on the company’s platform, as pointed out on the company’s call with the investor community. Revenue of $305 million was up 252% year on year, while loan volume rose by more than threefold.

Toast, meanwhile, slid by 35% in the wake of its latest earnings report, which missed Street expectations. In terms of the data, the company said that revenue was up more than 111% to $512 million. But supply chain costs continue to be a challenge for the restaurants it serves, which means that freight costs continue to eat into margins.

Doma Holdings, which provides real estate title and escrow services, said that its earnings results showed revenues up 17% year on year to $138 million. But rising expenses also crimped margins (rising interest rates, of course, may also impact real estate related activities); the stock has been off more than 30% through the past several days.