NEW YORK (AP) – The U.S. government shutdown is waving a caution flag at private companies racing to make the move to the public market. The market for initial public offerings has been on a years-long recovery after spiking inflation slammed the brakes on activity in 2022. The IPO market is already on track for its best year since 2021.
Government shutdown threatens to stall the recovery in the IPO market
NEW YORK (AP) – The U.S. government shutdown is waving a caution flag at private companies racing to make the move to the public market.
The market for initial public offerings has been on a years-long recovery after spiking inflation slammed the brakes on activity in 2022. The IPO market is already on track for its best year since 2021 with 163 deals and $31 billion in proceeds raised so far, according to Renaissance Capital.
Companies rely on the U.S. government, through the Securities and Exchange Commission, to review and approve IPO filings, while monitoring the ongoing process. The SEC is now operating with minimal staff, significantly delaying or halting those reviews and approvals.
Investors and companies are dealing with more than just technical issues. A prolonged government shutdown could sap confidence in the U.S. markets and economy. IPO activity typically remains strong through October, then slows in the U.S. during the final two months of the year.