IPO Market Rebounds as Tech Companies Prepare for Floating Shares with Morgan Stanley Leading Charge

Following a prolonged period of inactivity, the initial public offering (IPO) market is making a comeback. According to Colin Stewart, global head of technology equity capital markets at Morgan Stanley, up to 15 tech companies could go public before the end of this year alone, with an even better year expected for 2025. The IPO drought began in 2022 when high inflation and rising interest rates prompted investors to pull out of riskier assets and resulted in many firms postponing their plans to float shares on public markets. However, recent offerings have been well received by the market with strong opening prices. In September alone, Instacart and Klaviyo made successful debuts while Reddit’s IPO earlier this year broke a prolonged period of relative stasis for high-profile social media floats since Pinterest in 2019. Data centre connectivity chipmaker Astera Labs also saw its stock surge on the first day of trading last month, as investors continue to pour money into AI-related stocks. Morgan Stanley has been a major beneficiary from this trend with both Reddit and Astera being among their recent clients; they stand to collect around $37m in total fees for these deals alone. Goldman Sachs was also recently involved in the listing of data management software company Rubrik, which climbed by almost 16% at its debut last week. Given that preparations can take six months from start to finish before an IPO goes ahead, Stewart predicts that many companies currently considering a float will likely hold off until next year so as not to clash with the US presidential election in November. Although valuations have dipped somewhat since their 2021 peaks and are now back at levels last seen in 2018-2019, Stewart argues that this is still a favourable time for companies looking to IPO; following almost six months during which growth stock values once more found favour with investors. SpaceX founder Elon Musk’s company has yet to announce its intention to float shares on the public market but given their size and rapid expansion, Stewart suggests they could make an impressive debut when it does happen.