IPO Market Loses Momentum After SpaceX's Blockbuster Debut
The global IPO market has hit a rough patch just four months after SpaceX's record-breaking $75 billion debut. Despite high hopes that Elon Musk's company would reignite the market, momentum has stalled, with several high-profile companies postponing their listings. Smart-ring maker Oura, data centre company SB Energy, petrol station chain EG Group, and nuclear energy firm Holtec are among those that have recently delayed their IPOs. This slowdown has cast a shadow over the market, particularly for tech megacaps like Open AI and Anthropic, which had been expected to follow Musk's lead.
Investment bankers and analysts attribute the shift to weak investor demand and concerns over soaring valuations in the artificial intelligence sector. Renaissance Capital noted that companies prepped deals with price expectations that now seem too high for the current market conditions. Worries about a downturn in AI have grown, fueled by fears over valuations and data centre pushback. SB Energy, backed by SoftBank, reportedly aimed for a $50 billion valuation despite not having any operational facilities, drawing scepticism.
Market volatility has also played a significant role in the IPO slowdown. Firms like Oura and Holtec blamed unfavourable market conditions for their decisions to hold off on listings. This caution comes amid volatile oil prices and rising bond yields, exacerbated by geopolitical tensions. Open AI and Anthropic have also delayed their filings, with Anthropic now targeting a mid-November listing and Open AI pushing back to 2027.
The slowdown is not limited to the US. The UK has seen only seven listings this year, raising £577 million in the first half. While London got a boost with African payments firm Airtel Money's £5.3 billion debut scheduled for October 14, pessimism remains high. Just 32 per cent of money managers expect a pickup in IPO activity in the next 12 months, down from 63 per cent six months ago. In Europe, boutique hotel company Ennismore has reportedly reconsidered its IPO plans, highlighting the widespread caution in the market.