Goldman IPO Boom
Goldman Sachs Predicts Resurgence in the IPO Market
Goldman Sachs indicates that the initial public offering (IPO) market in the United States, which experienced a downturn, is showing signs of recovery. The IPO Environment Index has surged from a low of seven to 93, with a reading of 100 representing the typical frequency of public debuts. This positive trend is expected to continue, but companies are yet to capitalize on the improved macro backdrop.
Although IPO activity remains below 2021 levels, there are glimmers of hope. Restaurant chain Cava recently raised $318 million in an IPO, with shares nearly doubling on the first trading day. This marked the best U.S. debut for a firm raising over $100 million since July 2022.
Goldman Sachs’ strategists anticipate further improvement in the IPO environment during the second half of 2023. Factors like CEO confidence, two-year Treasury yields, S&P 500 performance, and ISM manufacturing readings contribute to the positive forecast.
Despite the recent stock market surge, U.S. exchange-listed companies have raised only $11 billion by June 16, a fraction of the previous year’s total. Experts differ on when a significant rebound will occur. While some expect IPO activity to pick up in the next six months, others anticipate a more substantial change in early 2024.
Goldman Sachs’ analysis suggests that the IPO market is on the brink of resurgence, with the IPO Environment Index pointing to future improvement. However, the timing of a full recovery remains uncertain, as companies navigate the evolving landscape and market conditions.