US IPO Winter Ends... "15 Tech Companies to Debut This Year"

US Presidential Election Delays IPO... "Better Next Year"

The U.S. initial public offering (IPO) market is expected to enter a boom again. Morgan Stanley announced on the 29th (local time) that 10 to 15 technology companies will go public on the U.S. stock market within this year, and even more companies are waiting in line next year.

On the same day, Colin Stewart, Global Head of Technology Capital Markets at Morgan Stanley, said in an interview with CNBC, "Recent IPOs have high prices and strong trading, which is a good sign for the long term."

[Image source=Reuters Yonhap News]

In 2022, due to soaring inflation and rising interest rates, investors sought to avoid risks, leading major technology companies to postpone their listing plans, causing the IPO market to stagnate.

The sluggish IPO market began to heat up last September when Instacart, the U.S. version of Market Kurly, and marketing automation platform company Klaviyo successfully went public. In particular, social media (SNS) service Reddit and semiconductor design company Astera Labs, which went public last month, are credited with completely changing the atmosphere. On their first day of listing, Reddit and Astera Labs saw their stock prices surge by 48% and 72%, respectively. Following that, Rubrik, a data security startup invested in by Microsoft (MS), went public on the 25th and surged 16% on its first day.

Morgan Stanley participated as the lead underwriter for Reddit and Astera Labs' listings and earned approximately $37 million (about 50.9 billion KRW) in fees.

The IPO market next year is expected to be more prosperous than this year. Stewart said, "The IPO process usually takes six months," adding, "Companies currently considering IPOs are likely to postpone their public offering to 2025 to avoid overlapping with the U.S. presidential election in November."

Stewart also said, "The market has become accustomed to paying for growth again. Although it has not returned to the 2021 level, companies are receiving a fair price for growth. It seems that companies also think that IPOs are not a bad option."