“This is going to shut down the IPO market,” Kennedy says.
“The question is, for how long?”
The Great IPO Depression is bad news for everyone.
As long as IPOs remain stagnant,average Americanshave few ways to share in Silicon Valley’s wealth.
The numbers show how bleak things have gotten.
In 2021, 311 companies raised a record $119 billion.
From there, things went off a cliff.
For most startups, the promised land of Wall Street was no longer an option.
Examples abound:SpaceXis buying back its own stock.
Stripe has made clear it sees no need to rush into the public markets.
OpenAI, one of the fastest-growing companies in history by revenue, remains in private hands.
“They don’t have to deal with all the complications and obligations of being public.”
But while high-profile companies can afford to stay private, smaller startups are having a hard time going public.
And that means it’s harder for startups to get the exposure they need to attract investors.
Another barrier to IPOs is the widespreadeconomic uncertaintythat’s been generated by the Trump administration.
“Nobody knows what anything’s worth.
“You were able to lock in 30% growth from your existing customer base.
Now, your growth relies on new customers and that is far less certain.”
But another reason for the slump in IPOs, analysts say, may be the unrealistic expectations of investors.
Yet as outlooks have softened, investors continue to expect sky-high payoffs from IPOs.
So, what could spur a more robust market for IPOs?
“When markets recover, or at least stop falling, we’ll have that backlog.
I think we’ll start to see activity emerge.
I just don’t know when.”
Additional reporting byRebecca Torrence.
Dakin Campbellis a chief correspondent on Business Insider’s investigations team.
