The IPO Buzz: More in 2024

More is the buzzword for 2024. Wall Street expects that more companies will go public in 2024 than in 2023. Gene Munster of Deepwater Associates predicts that the IPO market will return to 2019 levels with more than 200 IPOs – up from 153 in 2023. The 2023 total, which includes SPAC IPOs, represents the slowest year since 2016, according to IPOScoop records. The IPO market’s slow pace in 2023 followed the disappointment of 2022, when traffic was light after the record run of 2021 – more than 1,000 IPOs – and the brisk volume – over 400 IPOs – of 2020.

Big IPOs – raising $100 million and up – are also expected to increase this year, compared with 2023. The first workday of 2024 brought two big filings after the closing bell on Tuesday, Jan. 2:

• BrightSpring Health Services, Inc. (BTSG proposed), a home and community health services company backed by private equity behemoth KKR, filed its S-1 for an IPO that the Street estimates could raise up to $1 billion. Goldman Sachs, KKR, Jefferies, Morgan Stanley, UBS, Bank of America Securities, Guggenheim Securities and Leerink Partners are the joint book-runners. This is a NASDAQ listing.
• CG Oncology, Inc. (CGON proposed), a California clinical biotech developing a new treatment for bladder cancer, filed its S-1 for an IPO that could raise $100 million, which is most likely a placeholder figure. Morgan Stanley, Goldman Sachs, Cantor and LifeSci Capital are the joint book-runners. This is a NASDAQ listing.

Those two big deals followed the splash made last week by Kazakhstan’s “super app” Kaspi.KZ (KSPI proposed), which filed its F-1 to go public and raise about $100 million. (That figure may be a placeholder.) Kaspi.KZ is a FinTech that enables online banking, payments and e-commerce. Morgan Stanley, J.P. Morgan and Citigroup are the joint book-runners.

The U.S. stock market’s powerful rally in late 2023 and the Fed’s pivot toward three interest-rate cuts in 2024 are driving the optimism created the conditions that are essential to a healthy IPO market.

But 2024’s first trading day was a bust. U.S. stocks and bonds slid in what Bloomberg called one of the worst-ever starts to a year.

Greg Martin, managing director of Rainmaker Securities, called 2023 “a mixed year” for U.S. financial markets in an interview with BBN Bloomberg on Friday, Dec. 22, 2023. Martin said he expects 2024 to be “a rebound year” for the IPO market during his interviews with BBN Bloomberg and Yahoo Finance. The mixed aftermarket performance this fall by 2023’s high-profile IPOs – Arm (ARM), Instacart (CART) and Klaviyo (KVYO) – and the shock of Birkenstock’s IPO flop in October gave big banks and their clients ample reasons to stay on the sidelines in the last quarter of this year, Martin said.

Stripe, Reddit and DataBricks are among the big names on this year’s IPO Watch List, according to Martin. Stripe, the big payments company, and Reddit, the online platform, have been on this list for years – often cited by IPO experts, the financial press and tech websites alike. (We’re looking at you, Crunchbase.). In Martin’s opinion, a more likely candidate for 2024’s IPO Runway is Turo (TURO proposed). Turo’s IPO is a New York Stock Exchange listing. Turo describes itself as “the world’s largest car-sharing platform,” according to the prospectus.

Stay tuned.

(For more information about these companies, please check the IPO Calendar and the individual IPO Profiles found on IPOScoop.com’s website.)

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Disclosure: Nobody on the IPOScoop.com staff has a position in any stocks mentioned above, nor do they trade or invest in IPOs. The IPOScoop.com staff does not issue advice, recommendations or opinions.

Disclaimer: A SCOOP Rating (Wall Street Consensus of Opening-day Premiums) is a general consensus taken, at press time, from Wall Street and investment professionals concerning how well an IPO might perform when it starts trading. The SCOOP Rating does not reflect the opinions of anyone associated with IPOScoop.com. The SCOOP ratings should not be taken as investment advice. The rating merely reflects the opinion of the professionals at the time of publication and is subject to last-minute changes due to market conditions, changes in a specific offering and other factors, such as changes in the proposed offering terms and the shifting of investor interest in the IPO. The information offered is taken from sources we believe to be reliable, but we cannot guarantee the accuracy.