Software selloff is disrupting some M&A and IPO deals, US bankers say

A broad selloff in software stocks is starting to stall deal-making and IPOs in the sector as volatility makes valuations unreliable and potential buyers cautious, about a dozen financial advisers and dealmakers told Reuters.

The months-long rout deepened last week, with the S&P 500 software and services index posting its worst three-month performance since May 2002, Evercore ISI equity strategists said.

While the sector has clawed back some losses, it is still down about 25% from its October 28 record while the S&P 500 is up 1%.