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The IPO Market Endures in the Face of Turbulence
Capital Overhang is Necessitating an Increase in Wall Street IPOs
Oct 11, 2024 | Kevin Whiteley
"I think it would be incumbent for us to make it easier and cheaper to go public, and we have to figure out a way to do that."
- Jamie Dimon, CEO of JP Morgan Chase & Co
Bloomberg Interview
By Hannah Levitt and Lisa Abramowicz
October 8, 2024 at 9:58 AM EDT
IPOs are still occurring, even while the U.S. dollar is relatively weak and banks are losing deposits to money-market funds. Inflation and supply-chain problems continue to drive up prices across the country. Job reports are also being revised downward. Despite these challenges, such economic conditions can push companies to persevere, seek new opportunities, and launch IPOs to stimulate markets. Further, the $3.7 trillion in capital overhang provides greater motivation to fuel these offerings.
Necessitating an IPO Increase
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The glut of capital overhang necessitates an increase in IPOs, as capital markets and the financial ecosystem as a whole remain fertile for new businesses and emerging entities.
On a legislative level, Senate Bill 532 (Money Services Businesses Bill) is also conducive to ultimately empowering more IPOs—perhaps it will eventually be considered for federal legislation.
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IPO Snapshot​
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Currently, the majority of IPO deals are sponsor-backed assets, which could enable firms to decrease their respective debt loads or give investors additional options.
Year-to-date proceeds are roughly $35.2 billion—a 61% increase from 2023. Approximately 28 companies went public in September—far more than in recent months—with July being the top month for IPO execution in the U.S. thus far (over $6 billion in offerings).
Notable IPOs include*:​
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Lineage, Inc. | LINE ($5.1B hitting over $75 per share)
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Standard Aero, Inc. | SARO (over $1.6B at $24 per share)—now at more than $32 per share
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OneStream, Inc. | OS ($563.5M at nearly $30 per share)
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Concentra Group Holdings Parent, Inc. | CON (almost $529M at roughly $20 per share)
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Bicara Therapeutics, Inc. | BCAX (more than $362M at around $22 per share)
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BKV Corp. | BKV ($270M at $18 per share)
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FrontView REIT, Inc. | FVR ($250.8M at a close $19 per share)
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BioAge Labs, Inc. | BIOA ($227.7M at $22.6 per share)
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Zenas BioPharma, Inc. | ZBIO (nearly $225M at almost $18 per share)
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Ardent Health Partners, Inc. | ARDT ($220.8M at $17.4 per share)
*Note: share prices are subject to change.
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The preceding IPOs are the high-scoring offerings within the last 90 days—further evidence of capital overhang.
The rough total of these top IPOs comes in at $9.35 billion, which adds to the effort of strengthening markets and hopefully outperforming 2018’s overall, IPO-capital-raise figure of $46.8 billion.
Dynamic changes in parameters and policies would likely permit more companies to file for an IPO and see potentially healthier numbers amid their offerings.
New companies could implement bold, strategic planning and action in the meantime, as there is talk that deals are starting to pick up again—more IPOs are scheduled for October and the coming months.
Sources:
Marketwatch USD Index: https://www.marketwatch.com/investing/index/dxy
“US Banks See Further Deposit Outflows As Money-Market Fund Assets Hit Another New Record High”
“US Port Strike Ends After Three days, But Backlog Could Take Weeks to Clear”
“Record Seasonal Adjustment Tones Down Blowout US Jobs Report”
“Capital Markets' $3.7 Trillion Problem”
Florida Senate Bill 532 Analysis and Fiscal Impact Statement
“Senate Bill 532: Catalyzing Innovation and Growth in Florida”
“JPMorgan Says IPO Market for PE-Backed Companies Is ‘Very’ Open”
New York Stock Exchange (NYSE) IPO Center/IPO Data