As turbulent U.S. equity markets cloud the picture for initial public offerings, some on Wall Street are urging companies to temper their valuations for a better chance of pulling off a successful deal.
Stablecoin issuer Circle Internet Group filed publicly for a listing on Tuesday, joining a hopper of companies including Klarna Group Plc and MNTN Inc. hoping to go public in the coming weeks and months.
Even hotly anticipated deals, however, run the risk of being battered by the economic gloom and market gyrations that have weighed on investors’ appetite for IPOs. Four of the ten largest US deals of 2025 are already below their offer prices.
“There have certainly been idiosyncratic IPO performances this year, but feedback from investors is that they’ll be supportive of high-quality assets coming to market at reasonable valuations,” said Mike Ventura, co-head of US equity capital markets at RBC Capital Markets. “For clients already considering an IPO, we’re encouraging them to continue down that path.”
Cloud-computing provider CoreWeave Inc., the latest large offering, had to walk back its IPO size by about 40% from the midpoint range pitched by bankers after pushback from investors. Shares of the company rebounded this week to trade above its IPO price.
Two months prior, liquefied natural gas exporter Venture Global Inc., the year’s largest US deal, also slashed its marketed range by more than 40% — although its shares have been pummeled following their debut.
Companies have raised some $13.7 billion in first-time share sales through April 2. While that’s an improvement over last year, it’s well below what many on Wall Street had anticipated, due in large part to selloffs in US stocks spurred by worries over US trade: the benchmark S&P 500 is down some 8% from its February peak while the small-cap focused Russell 2000 has slumped nearly 9% year-to-date.
Meanwhile, the Cboe Volatility Index sits just above 20, a level many investors see as a danger zone for new deals.
“Volatility is making it very difficult to price IPOs of very good companies with very good business plans,” said Mike Bellin, IPO services leader at PwC. “It hasn’t been the start to the year that we all expected, but companies are staying active.”
Companies that can court investors despite a choppy market backdrop need to have strong balance sheets and growth stories that can attract would-be buyers, bankers said. Striking a balance on valuation will also be key, bankers and advisors agree, since money managers are likely to be more discerning regarding which deals they participate in.
“When public equities are on sale, that reduces the incentive at the margin to deploy capital into IPOs,” said Brian Demain, mid-cap growth portfolio manager at Janus Henderson.
