The US IPO market has experienced turbulence recently as newly listed technology companies delivered losses, dampening investor enthusiasm ahead of anticipated mega-listings later in the year. Broker Clear Street Group significantly reduced its IPO target, following a similar move by Brazilian fintech AGI. These adjustments occurred shortly after Liftoff Mobile, backed by Blackstone, postponed its IPO amidst a downturn in technology stocks.
The market is keenly awaiting potential record-breaking IPOs, including Elon Musk’s SpaceX and possibly its xAI unit’s artificial intelligence competitors. However, the recent struggles of technology-focused IPOs, particularly those pitching themselves as technological disruptors, highlight investor concerns about the impact of artificial intelligence on even cutting-edge tech companies. These concerns are impacting both investors and their advisors.
Matthew Kennedy, senior strategist at Renaissance Capital, noted that investors are exercising caution. Renaissance Capital provides pre-IPO research and IPO-focused exchange-traded funds. Kennedy stated that investors are passing on deals where there is any doubt, showing no fear of missing out and preferring to wait.
Currently, investors are content to observe from the sidelines, awaiting proof of value or post-IPO stabilisation. According to Bloomberg data, over half of the 15 companies that raised over $US100 million each through US IPOs are trading below their offer prices. Specifically, five of these stocks are trading at least 15 per cent lower than their initial IPO prices.
