In just a few weeks, the U.S. IPO market has swung from desolate to bustling, with multiple companies planning to raise as much as $17.3 billion this month alone, seeking to seize the opportunity presented by the stock market’s strong resilience to secure financing. Over the next few weeks, as numerous companies rush to complete their listings before the most anticipated market event of the year—Elon Musk’s SpaceX planning a record-breaking IPO in June—tens of billions of dollars are expected to be raised through IPOs. Bob Doll, CEO of Crossmark Global Investments, stated that if he were leading any company hoping to attract IPO investors, he would likely choose to go public before the SpaceX deal. Given that the situation in Iran could still trigger sharp volatility in the stock market, and that companies planning to list need to update their financial statements in late May, many IPO candidates seem to have concluded that now is the optimal time to go public.
So far this month, the U.S. IPO market has raised $5.4 billion, with newly listed companies once again delivering profits to investors, igniting enthusiasm on Wall Street. According to compiled data, excluding special purpose acquisition companies (SPACs) and closed-end funds, the weighted average return of newly listed U.S. stocks this year has surged to 21% from 4.6% just a week ago, far exceeding the S&P 500’s 4.2% gain over the same period. To improve IPO success rates, companies are deploying various strategies, including introducing so-called cornerstone investors, reducing the number of shares offered, and offering attractive discounts compared to already listed peers. Dan Klausner, head of U.S. public equity advisory at Houlihan Lokey Inc., said that market pricing is becoming increasingly rational and restrained, and that success creates a demonstration effect—once a peer prices reasonably and performs well post-IPO, other companies will find it more appealing to list at a modest discount.
Companies planning to go public this week aim to raise nearly $2 billion in total, including X-Energy (XE), a nuclear power company backed by Amazon (AMZN), which plans to raise $814 million. If these deals proceed smoothly, they will continue the busiest month since last December—when total fundraising reached approximately $8.8 billion, driven primarily by the major listing of Medline Inc. (MDLN). Sumit Mukherjee, head of equity capital market intelligence at JPMorgan, said that four IPOs are scheduled to price this week, and eight other companies have publicly filed listing applications last week. Against the backdrop of continued stock market strength, he expects near-term equity capital markets to remain highly active. Billionaire Bill Ackman’s closed-end fund and hedge fund plan to raise up to $10 billion, and its IPO pricing on April 28 is expected to serve as a litmus test for retail investor appetite. The performance of these subsequent IPOs will directly affect the listing processes of more than a dozen companies waiting in line, including AI chipmaker Cerebras Systems (CBRS) and the data center acquisition vehicle of Blackstone Inc. (BX), both of which are expected to raise at least $2 billion each, potentially driving consecutive months of active IPO activity in the U.S. market before SpaceX’s record-breaking listing.
