CNBC's Jim Cramer said Monday that too many initial public offerings coming to Wall Street pose a greater risk to the stock market than the U.S.-China trade war.
"Just say no to IPO," Cramer said on "Squawk on the Street." "The market can't handle another IPO. There's just no money around."
Earlier Monday morning, the "Mad Money" host tweeted that IPO oversupply is a "bigger threat to the U.S. markets than China." High-level trade negotiations resume in Washington later this week, with reports that Beijing may want to narrow the scope of the negotiations.
It's classic economics: The higher the supply (more shares), the lower the price. And it doesn't help that many of these new stocks are getting cool receptions on Wall Street after billion-dollar-plus private valuations fail to hold up under public market scrutiny — count shares of Lyft, Uber and Peloton among them.
WeWork felt the wrath of potential public investors — enduring weeks of negative news on concerns about slashed valuations, confusing corporate governance, and a more than $900 million loss for the first six months of 2019, before pulling its IPO last week.
Earlier Monday, former Nasdaq CEO Bob Greifeld warned on CNBC that this year's IPO climate feels similar to the late 1990s dot-com bubble.
"In a sense, it reminded me back of the dot-com era, when you had companies going public that had no known path to profitability," said Greifeld, chairman of high-speed computerized trading firm Virtu Financial.