Companies touting their artificial intelligence and crypto-sector ties are speeding up their IPO timelines, after triple-digit first-day pops became a regular feature in this summer’s sizzling US market for new issues.
Crypto companies finalizing paperwork with regulators to potentially go public after the Sept. 1 Labor Day holiday in the US include Gemini Space Station Inc., led by the billionaire Winklevoss twins, and blockchain-based credit company Figure Technology Solutions Inc. Plenty of candidates weighing debuts this fall are talking up their AI usage, such as payments company Klarna Group Plc pointing to efficiency gains allowing the company to stop hiring in 2024, reducing its employee headcount by 22% that year mostly through attrition.
Challenges such as this year’s tariff drama made would-be debutants hesitant, but that disappeared as technology companies like Figma Inc., which also included its AI credentials in its pitch, and stablecoin issuer Circle Internet Group Inc. have staged euphoric listings, more than doubling on debut.
“We are seeing people in the technology sector accelerate their timelines, in some cases people who were looking later this year or early next year are asking can we get it done sooner,” said Will Connolly, Goldman Sachs Group Inc.’s co-head of equity capital markets in the Americas.
Dozens of companies could go public by the end of this year, potentially raising more than $15 billion in total and taking the amount raised by IPOs, excluding SPACs, to approach $40 billion this year, according to Keith Canton, JPMorgan Chase & Co.’s co-head of Americas ECM.
Last year saw $27.5 billion raised on US exchanges, not including SPACs, REITs and closed-end funds, data compiled by Bloomberg show.
JPMorgan is working with about 10 companies that are on file publicly or confidentially in its IPO pipeline and another 15 to 20 companies that are actively testing the waters, Canton said.
Scarcity value is a big factor in the sectors that have seen such explosive post-IPO trading. In crypto debuts, equity investors’ limited ways to get exposure to the assets, and insatiable retail demand for the theme, are driving a lot of the moves, said Nick Williams, head of Americas ECM at Deutsche Bank AG.
“The real trick is to see how much long-only fundamental money you can maintain in your shareholder register,” Williams said.
Lofty Expectations
The fall window often comes with lofty expectations, but the momentum in recent months is a particularly big draw for a number of high-profile names such as StubHub Holdings Inc. After pausing its IPO plan in April, the ticket selling exchange updated its filings last week for a potential listing, a goal it has pursued since at least 2022.
The prospect of interest rate cuts starting next month could also help out private equity-backed IPO candidates weighed down by leverage.
John Kolz, Barclays Plc’s global head of ECM, is among those who see a very busy fall as the number of deals picks up.
“It’s dusting off the processes that were on hold, accelerating processes that have been in the hopper and the pickup in potential dual tracks,” he said, referring to so-called dual-track processes where the asset is being considered for either a sale or an IPO.
“The momentum is very real and it is across all of equity capital markets,” said Matt Warren, Bank of America Corp.’s head of Americas ECM origination.
Several companies that have been mentioned in conversations with bankers and investors for months are moving ahead. Cybersecurity firm Netskope is considering an IPO as soon as after Labor Day, according to people familiar with the matter. Andersen, founded by alumni of shuttered accounting firm Arthur Andersen, is working with Morgan Stanley and UBS Group AG on a listing, people familiar with the matter said, asking not to be identified as the information isn’t public.
Andersen’s IPO could also come as soon as in early September, though it may take longer, the people said. Representatives for Netskope and Andersen didn’t immediately respond to requests for comment. Spokespeople for Morgan Stanley and UBS declined to comment.
Economic Weakness
The Federal Reserve lowering interest rates isn’t necessarily a reason to celebrate. There are concerns about potential weakness in the US economy, including the impact of significant tariffs on imported goods, and worries around a stock market that has soared more than 28% in just four months.
“We are talking to all of our clients about what some of the potential pitfalls could be here in the broader market,” said JPMorgan’s Canton. “While there could be rate cuts, I don’t know how deep they’ll be out of the gate and there are also a lot of questions around long-term deficits.”
Typically, the opportunities for an uninterrupted marketing and listing process start to narrow after the beginning of September. In this case, the impact of a stock market pullback could sour investor appetite for new companies even before the calendar dings other would-be IPOs.
“You’re juggling the Jewish holidays, Q3 close, financials getting stale mid-November, and broader macro trends,” said Clay Hale, Wells Fargo & Co.’s co-head of ECM. “It’s a very complicated window to get right.”
“It’s more about confidence,” said Goldman’s Connolly. “One of the major challenges the last couple of years was concerns about something else being around the corner. As time passes there’s more comfort in the resiliency of the economy and the markets. The market could have a modest pull back and I don’t think that would disrupt the trajectory we’re on with more capital markets activity.”
The US IPO market is looking to put a few slow years following the record boom of 2021 behind it. This latest risk-on atmosphere is fanning hopes that 2026 will continue that rise.
“We’re marching upwards and we’re very squarely now back in what I would consider pre-Covid or normalized averages, but I don’t think anyone is saying we are back to 2021 levels any time soon,” Canton said.
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