Wall Street initial public offerings have slowed to a trickle as tepid investor demand for new deals and worries about high valuations weigh on what was tipped to be a bumper quarter of new listings. Petrol station empire EG Group, nuclear energy group Holtec, smart ring start-up Oura and data centre company SB Energy have in recent weeks all hit pause on plans to list in the US. Bamboo Insurance postponed its IPO last month.
A delay in two highly anticipated Wall Street debuts has also darkened sentiment in US equity capital markets. Anthropic, whose backers hope it to list at a valuation above $2tn, is expected to go public in mid-November after the US midterm elections, later than previously expected. Rival Open AI has pushed its blockbuster IPO into next year. "Right now no one cares about anything that isn't Anthropic.
Investors aren't excited about these other companies," said the head of equity capital markets at a large US asset manager. Investment bankers have enjoyed a roaring year, thanks largely to Space X's IPO in June, which raised a record $86bn, and a burst of debt offerings by Silicon Valley tech groups seeking to finance massive spending on data centres. But the IPO market has dried up in recent weeks as worries about a downturn in the AI sector and the public's opposition to data centres have come to the fore.
Many of the smaller IPOs have been postponed owing to investors' growing scepticism about the "tone deaf" valuations assigned to companies connected to the AI investment boom, the banker added. Soft Bank-backed SB Energy is targeting a valuation of about $50bn despite not bringing a single facility online. Tech listings this year have on average fallen about 23 per cent since their first day of trading, according to BCA Research, compounding worries that banks are overpricing deals to win mandates.
Source: Financial Times Companies · Summarized by HeadlinesBriefing