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The US-IPO Market Rebounds Strongly Heading Into 2025
The rise of new public listings signals a promising outlook for 2025
Nov 26, 2024 | Kevin Whiteley
"Access to the public markets gives them [biotechs] the opportunity to continue raising capital as they need it, faster than they would as a private company."
- Ross Carmel, partner at securities law firm
Sichenzia Ross Ference Carmel
Reuters Interview
By Niket Nishant and Manya Saini
September 26, 2024 at 2:41 PM EDT
The IPO market has seen a notable recovery as 2024 progresses, with a significant uptick in public listings and market activity. As we approach 2025, IPO proceeds have already surpassed last year’s totals, with North American markets raising $27.3 billion through the first three quarters—an increase over 2023’s $19.4 billion. This resurgence is highlighted by high-performing stocks and market capitalization growth, setting the stage for what promises to be a thriving year ahead for investors and companies alike.
IPOs on the Rise
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The third quarter of 2024 strengthened IPO activity as the amalgamated North American market heads into 2025. Q1-Q3 of 2024 accrued proceeds totaling $27.3 billion, topping the previous year’s quarters, which entailed only $19.4 billion[1]. These stocks are but a sample of IPOs that have bolstered what will hopefully be a prosperous path for investors as they soon enter a new year.
Reddit (RDDT) ran a second IPO that earned the platform a market capitalization of $6.4 billion[2]—now up to $25.75 billion—and is currently trading at nearly $145 per share (initially at $37.35). The social media entity has sustained a 52-week high and perpetuated its ascension, most likely due to the company staying active in deals[3].
[1] Ernst & Young: “Optimism Builds for the 2025 IPO Market”
Septerna, Inc.’s (SEPN) recent IPO, with proceeds totaling $288 million[4] and a market capitalization of $976.86 million, is trading at the higher end of its 52-week range—$18.62-$26.34. The Goldman Sachs-backed drug developer’s market cap figures alone have surpassed its anticipated valuation numbers[5][6].
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Platinum Equity-owned Ingram Micro Holding Corp. (INGM) raised $409 million[7] amid its IPO. The global, “people-first” IT-products-and-services distributor received almost $470.6 million in proceeds, with a free float of 22.03 million shares, and is currently at a market cap of $5.17 billion. Ingram Micro’s sustaining its 52-week spread of $21.14-$25.69 while somewhat slow in early trading—ultimately perpetuating its desired range ($20-$23 per share).
[4] NYSE IPO Center
[5] “Goldman-Backed Biotech Septerna Targets $628 Mln Valuation in US IPO”
[6] “Septerna Valued at $970 Million as Shares Rise Nearly 31% in Nasdaq Debut”
[7] “Platinum Equity's Ingram Micro to Raise About $409 Mln in US IPO”
Astera Labs, Inc. (ALAB), a California-based chip firm, appears to be soaring since its Q1 IPO[8]—from $9.68 billion to currently $16.22 billion in market capitalization. The Santa Clara, artificial-intelligence company grossed $819.7 million[9][10] in proceeds—expected amount: $604.4 million—and broke out from its 52-week range ($36.22-$99.84)—now at a high of $113.85. The technology entity has seen a roughly-198-percent increase in share price, from its opening of $36.
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Eagle Equity Partners IV, LLC-sponsored Bold Eagle Acquisition Corp. (BEAGU) is ripe for investing, upon its IPO[11]—just north of $10 per share presently. The blank-check business, with a market capitalization of $250.5 million, appears to be holding steady, teetering on breaking its resistance area ($9.96-$10.02).
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Upstream Bio, Inc. (UPB) ran a J.P. Morgan/T.D. Cowen/Piper Sandler/William Blair collaborative IPO, which saw gross proceeds of around $293 million[12]. The Waltham, Massachusetts-based, bio-technology company’s opening price was $17 per share—trading activity appears to have seen some hurdles—and has a market capitalization of $974.92 million. But this medical stock also looks to be reaccelerating, as its share price is at nearly $19. The healthcare sector itself has an overall, capital raise of $6.6 billion for 2024, giving it a lead in the US-IPO market, according to data from London Stock Exchange Group[13].
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(NOTE: share prices and market capitalizations are subject to change.)
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[8] “Astera Labs Shares Jump Over 70% in Stellar Nasdaq Debut”
[9] “Astera Labs Announces Pricing of Initial Public Offering”
[10] Simpson Thacher & Bartlett LLP: “Astera Labs Completes $819.7 Million Initial Public Offering”
[13] “Upstream Bio Valued at $1.1 Bln in Stellar Debut as Healthcare IPOs Heat Up”
Post-IPO market capitalizations and relatively healthy share prices are indicators that the IPO market is seeing a gradual re-growth. The exemplary Astera Labs, with its March 2024 IPO at $36 per share, raised approximately $712.8 million—now has a market capitalization of $16.22 billion (a roughly 68-percent increase)—is still trading at the higher end of its 52-week range.
These cases and others—especially those with initial, market capitalizations between $5 and $6 billion and have driven significant, valuation increases within months upon successfully launching IPOS—suggest a fertile, market environment, robust investor confidence, and favorable conditions for upcoming, public listings.
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Even Morgan Stanley seems to be tapping the IPO market, as the investment banking firm is seeking employees from start-up companies in an effort to acquire wealth-management clients[14].
[14] “Morgan Stanley Courts Employees of Near-IPO Companies for Wealth Management”
The IPO market is a testament to capital markets' strength and resilience amid volatility and uncertainty. Publicly listed companies play a crucial role in driving the broader economy, empowering both investors and the free market. The continued momentum in IPO activity reflects growing confidence in the stability and potential of public listings, even in challenging times.
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As more companies successfully navigate their path to the public markets, the resilience demonstrated by recent IPOs signals a positive outlook heading into 2025.
With strong market performance and increasing investor appetite, the IPO space is primed for another successful year, solidifying its vital role in shaping the future of global capital markets.