The IPO market gets cold feet

livemint.com:

September is a popular time for companies to go public. This month’s stock-market volatility is putting some plans on ice. Companies weighing whether to make their stock-market debuts face a critical decision in the coming weeks: pull the trigger soon so they can launch their deals before year-end or hold off until 2025.

The outlook isn’t rosy. The growing consensus among companies considering initial public offerings is to wait until next year, many bankers, lawyers and corporate executives say. It isn’t just the market’s recent choppiness, they say, but that turbulence could flare up again, given the uncertainty around November’s presidential election and how much the Federal Reserve will cut interest rates this year.

Last week, Chinese autonomous-driving technology company WeRide postponed its IPO, saying it needed more time to finalize documents. Ticket-resale company StubHub last month pushed off launching its roadshow for investors until September at the earliest, though some people familiar with the offering say it is likely to be delayed until 2025. Others on the sideline considering late-2024 IPOs include artificial-intelligence chip maker Cerebras, according to people familiar with the matter.

The idea that 2025 would be the year that IPOs came back has been “singing in the chorus" since spring, said Clay Hale, co-head of equity capital markets at Wells Fargo. There was some optimism that the end of 2024 would at least be busier, but the recent market volatility seems to have all but extinguished those hopes. “It’s really hard to plan to do deals in the fourth quarter unless you know the market is great," Hale said.