(Oct 1): SK Hynix Inc’s US$26.5 billion (RM108.3 billion) US listing kept the streak of artificial intelligence-related mega-deals going in the third quarter, even as a trio of postponed smaller IPOs cast doubt on the market’s prospects aside from Anthropic PBC’s expected debut.

IPOs on US exchanges raised US$36.1 billion in the three months ended Sept 30, excluding blank-check firms and other investment vehicles, with the South Korean memory chipmaker’s sale of American depositary receipts accounting for the bulk of it, according to data compiled by Bloomberg.

The latest quarter was the second-busiest since 2021, trailing only the three months ended in June that saw SpaceX and others lead a US$117 billion bonanza, the data show.

Three companies postponed sizeable IPOs in September. Nuclear power services firm Holtec Nuclear Corp, home insurance platform Bamboo Insurance Services Inc and health and wellness ringmaker Oura Inc all blamed the market, even as stock benchmarks touched all-time highs.

Institutional investors were lacking conviction in whether they needed to own many recent IPOs, especially long-only investors, said Renos Savvides, Neuberger Berman Group’s head of equity capital markets.

“Whenever you have a blip in the IPO market like the one we’ve seen recently, you need a watertight deal or something that comes at an attractive valuation so people feel good about how it will work out,” Savvides said in an interview.

Backing the biggest issuers proved to be a winning strategy. SpaceX and SK Hynix are up 12% and 24% respectively since their debuts, lifting the weighted average return from this year’s US IPO class to 8.8%, data compiled by Bloomberg show.

The performance of many smaller IPOs has been lacklustre, as investors have become more choosy about the winners and losers from the AI revolution and rising rates have put pressure on growth stocks. Excluding deals raising more than US$10 billion, US IPOs this year have fallen 4% on a weighted average basis, the data show.

Listings for SK Hynix, Bending Spoons SpA, Csquare Inc and Jersey Mike’s Subs Inc each raised more than US$1 billion in the third quarter. Of the four, Csquare and Jersey Mike’s are now trading 25% or more below their respective IPO prices.

With US$162.6 billion raised this year, all eyes are on a potential listing for Anthropic raising as much as SpaceX or more. That would propel the total volume well past the
US$195.2 billion record set in 2021.

Uploaded by Evelyn Chan