on may 5 the company formerly known as valeant pharmaceuticals took its eye care unit bausch  lomb blco public the motivation for taking eye care bausch  lomb public was profit but it looks like parent company vaughan ontariobased bausch health companies bhc named as such to make investors forget about valeant’s stormy history is taking a 28 haircut on this disappointing ipo this is bad news for the ipo market and for moneylosing startups that are already struggling to raise more venture capital vcs are seeing the possibility of a profitable exit fade too far into the future and i see no reason to buy shares of the newly public bausch  lomb bausch  lomb has a storied history in the public and private markets the company traded on the nyse for 50 years until 2007 when two private equity firms bought it for 45 billion in 2013 the governancechallenged pharmaceutical company valeant bought bausch  lomb for 87 billion after weathering an accounting scandal and facing scrutiny for acquiring drugs then steeply hiking their prices in 2018 it changed its name from valeant to bausch health companies according to the financial times the ipo takes public bausch  lomb bhcs eyecare division which sells contact lenses eye drops and implantable lenses for cataract surgery in more than 100 countries it sells more than 400 products more than 260 of which came on the market since 2017 a regulatory filing described a plan to offer 35 million shares in a price range between 21 and 24 per share if the plan had gone through the company would have raised 788 million at a valuation of 82 billion some 500 million below the price at which bhc acquired it six years ago i do not find its growth or profitability worth getting excited about although bausch  lomb grew modestly last year in 2021 its revenues increased 106 to 38 billion and it generated 182 million in profit so it came as no surprise to me that blco’s ipo was a disappointment as the wall street journal reported bausch  lomb priced its ipo at 18 a share 20 below the midpoint of its hopefor price range raising 630 million 33 lower than the top of the hoped for range that price values bausch  lomb at about 63 billion a whopping 24 billion below what bhc paid for the company back in 2013 unless blco stock soars for example closing about 30 a share when it opens for trade on the nyse today i expect other companies waiting on the ipo runway to delay going public according to the journal and bloomberg such companies include blco’s ipo was thought of as offering hope for a moribund 2022 ipo market as the journal reported ipos have “been virtually shut down since stocks started falling earlier this year after a record year in 2021 traditional ipos have raised less than 33 billion in 2022 the slowest start since 2016” a basic rule of market physics is what goes up quickly often plunges soon thereafter so after a record 2021 ipo and venture funding market 2022 is looking to very hard on both venture backed companies whose investors were hoping to cash out are now telling their portfolio companies to become self sufficient financially this comes as no surprise to me which is why i lamented in my 2019 book scaling your startup that most startups were skipping the second stage of scaling eg streamlining operations to get cash flow positive before taking on more capital companies that skipped right to stage three sprinting to liquidity are now forced to go back and do second stage here are some examples from axios   amazon thirdparty business acquirer thrasio valued at more than 5 billion canned 20 of its staff and replaced its ceo   instant delivery service gopuff terminated at least 3 of its people   fintech blend cut 10 and bettercom is in the midst of an “ongoing implosion”   digital health service noom “is cutting hundreds of weight loss coaches after raising more than 500 million” biotech which often takes startups public despite no revenue is also cutting jobs as i wrote in april this february and march akebia therapeutics bluebird bio and yumanity therapeutics announced plans to cut employment by 30 to 60 while in early april microbiome firm kaleido biosciences shut down altogether if bausch  lomb is the canary in the coal mine the ipo market is dead so is the funding climate for startups