Two would-be issuers, Holtec Nuclear Corp. and Bamboo Insurance Services Inc., just tapped the brakes on going public, blaming the market backdrop. The pause comes as investors wait for Anthropic PBC to finally show its hand after a hoped-for late August filing didn't materialize. In the meantime, Anthropic rolled out a cheaper model and publicly addressed worries about an AI apocalypse.
Bloomberg News has reported the company is targeting an amount on par with, or exceeding, SpaceX's haul in its landmark flotation. The broader calendar has also underwhelmed, with only three IPOs so far in what's usually a lively post-Labor Day stretch. "What makes it especially surprising is the Nasdaq just hit a record high, it's not like there's a big market downturn," said Jay Ritter, who serves as director of the University of Florida's IPO Initiative.
That gap between hot indexes and a cooler IPO tape has boards and private equity owners rethinking how much valuation risk they are willing to take.
Plenty of companies are queued up, just not crossing the finish line. Of the more than two dozen that have filed publicly since early July while working with at least one of Bloomberg's top five US equity IPO underwriters, only nine have gone public so far, per Bloomberg data. Three offerings are currently taking orders: Oura Inc. and some of its shareholders are seeking up to $2.2 billion next week, the same day data center infrastructure provider Accelevation Holdings Corp. is targeting $720 million.
After a public filing, issuers generally plan to list in about a month, but anxiety and weak peer showings can push schedules back. Still waiting after filing: Cumberland Farms Ltd. in early July, plus Intel Corp.-backed Syntiant Corp. and menswear seller Tailored Brands Inc. Aggreko Inc., which supplies temporary power systems, and SB Energy Inc., an AI infrastructure developer backed by SoftBank Group Corp., submitted their filings ahead of Labor Day and have yet to launch formal marketing. Some issuers and sponsors also held back when Anthropic was thought to be near a public filing, finding it tough to win attention from long-term-focused investors and sovereign wealth funds at the same time.
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"There's a calculus of how much does a company need the cash and how much can they wait to get a bigger bang for their buck," said Larry Tabb, Bloomberg Intelligence's global head of financial sector research.
A handful of blockbusters have propped up the year's fundraising. Bolstered by megadeals such as SpaceX's $86.2 billion debut and SK Hynix Inc.'s $26.5 billion ADR sale, US listings have amassed $161.4 billion year-to-date, excluding SPACs and other financial vehicles, according to Bloomberg-compiled data. Stock market performance has generally held up even with energy price swings and the Federal Reserve's effort to cool inflation.
In September, the S&P 500 has risen 1.1%, while the Nasdaq Composite is up more than 3% and at a record high. Still, a rate increase by the Fed earlier this month - plus the chance of another on the horizon - has made life harder for borrowers that depend on debt to finance spending. Matt Kennedy, a senior strategist with Renaissance Capital, said, "A rising rate environment hits the value of future cash flows and you have the higher cost of debt to do things like build data centers, so it is kind of a double whammy." Ahead of the most recent change, results for IPOs were uneven; of this year's 10 largest deals, five are currently trading under their offering prices.
Overall, this year's IPOs have returned a weighted average of 13%, a touch under the S&P 500's roughly 14%.
Patience is a theme. Companies that can afford to wait are weighing whether the window could get better. At Truist Financial Corp., West Riggs, who leads equity capital markets, put it this way: companies and their backers are "simply being patient and waiting for the right window." He added, "While the major indices are at or near all-time highs, the breadth of the rally and the underlying trading environment have been less consistent." Given the crosscurrents from geopolitics, oil, and the Fed, companies that have room to maneuver prefer not to jam a deal into spikes of elevated volatility.
If you're watching the IPO calendar for fresh ideas, expect fits and starts. Strong indexes can coexist with a stop and go new-issue market, especially when rates are rising and big, buzzy listings soak up attention. The takeaway is simple: timing matters, and not every good company rushes the gate at once.
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