The U.S. IPO market is slowly waking up from an 18-month hibernation, despite the Federal Reserve’s continuing tight monetary policies and economic uncertainties, noticed Lynn Martin, the president of the New York Stock Exchange.
“What’s getting my attention is the reopening of the IPO market, finally. Man, it has been closed for a minute, right?” Martin said during the Forbes Powerful Women’s Summit in New York City yesterday (Sept. 14).
Martin said a “soft reopening” of the IPO market started in the second quarter with an uptick in dealmaking of both U.S. and foreign companies in the forms of regular initial public offerings, spinoffs and SPAC mergers. The quarter saw notable listings on the NYSE such as restaurant chain Cava and Kenvue, Johnson & Johnson’s consumer health spinoff.
“A cautious reopening has started and continued,” Martin said.
Hours before Martin’s onstage speech, SoftBank (SFTBF)-owned chip design giant Arm began trading on Nasdaq at $51 per share, valuing the company at more than $51 billion and making it the largest IPO this year so far. Next week, marketing software maker Klaviyo is set to debut on the NYSE targeting a valuation north of $8 billion. It will be the first software IPO this year.
“The fact that there is a software IPO is going to get the venture market very excited,” Martin said, noting a yearlong funding drought in the private market in part due to the Federal Reserve’s interest rate hikes.
There have been 109 IPOs in the U.S. (on the NYSE and Nasdaq) in 2023, still down 30 percent from the same period last year, according to Stock Analysis. But the number of listings has steadily increased each month, suggesting an upward trend.
The U.S. market is “reopening in a very meaningful way before the rest of the world,” Martin said. And it could have major implications for the broader economy, because “the NYSE is more than just a listing venue,” she said. “We represent the U.S. capital market, which is the greatest market in the world for fundraising. If IPOs go well, it shows how the U.S. is the place to raise capital that funds innovation and entrepreneurs who bring in amazing products.”
“It’s not just about an IPO,” Martin added. “It’s about those innovations that change the world—clean energy, green energy, advancements in health care, etc.—that doesn’t happen if U.S. markets don’t work.”
Martin was appointed the president of NYSE in January 2022. She is the second woman to lead the stock exchange in its 231-year history. Before that, Martin worked for the NYSE’s parent company, the Intercontinental Exchange, leading its fixed-income and data business unit.
