Experts predict a slow recovery in the IPO market amid uncertainty and volatility.

  • The U.S. IPO market may see 30 to 50 deals raising about $10 billion before year-end.
  • Full recovery of the IPO market is not expected until 2025 due to market volatility and election uncertainty.
  • Companies are hesitant to proceed with IPOs, fearing poor reception and valuation issues.
  • 119 planned deals are in the pipeline, with some strong candidates for fall and 2025 listings.
  • Tech IPOs remain below historical averages, despite a doubling of activity compared to last year.

The U.S. initial public offering (IPO) market is projected to see between 30 to 50 deals by the end of the year, potentially raising around $10 billion. However, experts from Renaissance Capital caution that a full recovery is unlikely before 2025 due to ongoing market volatility and uncertainties surrounding the upcoming U.S. presidential election. Despite a slow recovery this year, IPO activity remains below the 10-year average. Bill Smith, CEO of Renaissance, noted that many companies are uncertain about their IPO plans, often hesitating between launching in the fourth quarter or waiting until the first quarter of next year. While the S&P 500 is nearing an all-time high, the IPO market tells a different story. Isabelle Friedhiem, founder of Athena Capital, highlighted that even though September is typically a strong month for IPOs, many companies are pulling back due to investor hesitance towards tech stocks and the looming election. Companies are concerned about their valuations and the potential for a negative reception upon debut. There is a prevailing ‘you go first’ mentality, with many firms waiting to see how others perform before making their move. Despite these challenges, Smith remains optimistic about the quality of upcoming deals, expecting fundamentally strong companies with growth potential and attractive valuations. Currently, there are 119 planned deals with updated regulatory filings, including notable candidates like Solera, a software provider for the automotive industry, and Grupo Aeroméxico. For the fall, companies like StubHub and Cerebras are on the radar, while 2025 could see listings from Databricks and Chime. The tech sector, however, continues to lag behind historical averages in terms of IPO activity, with many venture-backed unicorns choosing to stay private for various reasons. Notably, Solera is the largest tech filer, potentially raising up to $1.5 billion, while Turo aims for $300 million. Despite the challenges, 92 IPOs have been priced this year, marking a 35.3% increase from last year, with total proceeds reaching $23.3 billion. The Renaissance IPO ETF has gained 7% year-to-date, compared to a 15% increase in the S&P 500.

Factuality Level: 9
Factuality Justification: The article provides accurate and objective information about the U.S. initial public offering market, including expert opinions from Renaissance Capital and Athena Capital. It discusses the factors affecting IPOs, such as market volatility, uncertainty due to the presidential election, and the performance of specific companies. The article also includes data on the number of IPOs and proceeds raised this year. While it does mention some potential future deals, it doesn’t make any personal or biased statements.
Noise Level: 6
Noise Justification: The article provides relevant information about the current state of the U.S. IPO market and offers insights from industry experts. However, it contains some repetitive information and relies on predictions that may not necessarily come true. It also dives into unrelated territories by mentioning specific companies without providing much context or analysis.
Public Companies: Grupo Aeroméxico (AERO), Solera (SLRA), Turo (TURO), IAC Inc. (IAC), Renaissance IPO (IPO), S&P 500 (SPX)
Private Companies: Athena Capital,Cerebras,Specialty Building Products,Databricks,Chime,CoreWeave,WeRide
Key People: Bill Smith (Chief Executive and Co-Founder of Renaissance Capital), Isabelle Friedhiem (Founder and Managing Partner at Athena Capital)

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Financial Relevance: Yes
Financial Markets Impacted: The article discusses the potential impact of the U.S. presidential election on the IPO market and the uncertainty it creates, as well as the slow recovery of the IPO market this year. It also mentions specific companies planning to go public or considering an IPO in the near future.
Financial Rating Justification: The article discusses financial topics such as initial public offerings (IPOs), the impact of the U.S. presidential election on the IPO market, and the performance of certain companies in the tech sector.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Extreme Rating Justification: There is no extreme event mentioned in the article.
Deal Size: The deal size mentioned in this article is $1.5 billion for Solera, a Westlake, Texas-based company that makes software for the automotive and insurance industries.
Move Size: No market move size mentioned.
Sector: Technology
Direction: Up
Magnitude: Medium
Affected Instruments: Stocks

Reported publicly: www.marketwatch.com