The IPO Market Might Be Back. Why Investors Should Think Twice About Jumping In.

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While companies have lots to celebrate at IPO time, the story is often different for public investors. New shares of Instacart and Arm are already sagging.

Over the past two weeks, there have been three closely watched initial public offerings, and the results have been decidedly mixed. While I’d like to tell you that those deals pried open the IPO window, it feels more like someone hurled a brick through the glass. You can get through the window, but you might get hurt.

So, while it’s nice to see some appetite for new offerings, these three debuts have hardly produced the kind of excitement that venture firms and investment bankers wanted to see. “These three successful deals will be a catalyst for boardroom conversations, but it’s not like they will turn on the spigot,” she says. “I expect there will be a few more in 2023, but warming the engines back up after a long break takes several quarters....It’s not 1999 or 2021.”

Private equity exits: Kennedy says his shortlist of IPO candidates includes a handful of potential returnees. One is BMC Software, a leader in mainframe software now owned by KKR. It originally went private in 2013 for $6.9 billion. Last year, Ingram Micro, an electronics distribution firm, filed confidentially with the SEC for an IPO. Ingram was taken private in 2016 for $6 billion.

But thus far, none of these unicorns have filed public paperwork to go public. So, it could be a while.

 

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