Some of the hottest new listings are having trouble keeping the momentum going after much-hyped debuts.
SK Hynix is the latest example of a stock struggling after a splashy initial offering. While technically not a new IPO, momentum behind the South Korean chipmaker’s American depositary receipts has fizzled in the days since they were priced last Thursday.
The ADRs fell by nearly 10% on Monday after a brutal day of selling dragged the Korean-listed shares down 15%. While the ADRs are still trading slightly above the offering price of $149, they’ve tumbled sharply from Friday’s high around $175 as the chip trade struggles and memory makers fight against downward momentum that recently pushed the sector into a bear market.
But SK Hynix is only the latest example of an offering that rocketed higher before eventually running out of steam this year.
SpaceX — which garnered a nearly $2 trillion valuation and marked the biggest IPO of all time — saw shares soar as much as 25% in the days that followed the offering. The stock is now down almost 40% from its peak, trading below the $150 level at which trading began on June 12, and nearing the $135 IPO price.
Cerebras, an AI semiconductor maker, has also seen its stock struggle after a strong debut. The stock jumped 68% in its first day of trading, kicking off the wave of mega-IPOs expected in 2026. As of Monday, the stock is down 40% since it began trading on May 14.
Stocks are often volatile after their IPOs as shares go through a period of price discovery. The problem with buzzy tech IPOs is also that they’re coming at an awkward time for the market as AI hype that once seemed endless cools off.
SK Hynix priced its US offering right as the sector struggled against a bear market slide that sent some of the hottest stocks tumbling, including Micron Technology and Sandisk.
Meanwhile, there’s growing concern that the bar for more AI-fueled stock gains is higher heading into this earnings season. Unexpectedly strong results in the first quarter lifted the market, but companies will need to do more than simply beat earnings to keep gaining. That was illustrated most recently by Samsung, another darling of the AI memory trade, which reported stellar results by most metrics but saw its stock plummet as a result.
In the case of SpaceX, investors may also be positioning for volatility as they eye the end of the first lockup periods that could see more shares flood the market.
The pipeline of hugely anticipated IPOs is still full. Anthropic and OpenAI, two other pure-play AI giants, have filed confidentially for IPOs that are expected later this year.
“The IPO parade, which now looks like it’s turning into a stampede has been coming for a while,” Mark Klein, the CEO of SuRo Capital, wrote in a note on Sunday. “The need to access capital right now is pretty acute.”