Nasdaq CEO flags IPO slowdown amid market volatility

The initial public offering market has softened modestly as macroeconomic uncertainty and market volatility prompt companies to reconsider the timing of their public debuts, Reuters reported, citing comments from the Nasdaq's chief executive.

Adena Friedman said during Nasdaq's third-quarter earnings call that the long-term pipeline of companies preparing to go public remained robust, although businesses in certain sectors were reassessing their listing timelines amid an uncertain economic environment.

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Escalating conflict in the Middle East has fuelled an energy price shock, reviving concerns about global inflation and complicating the monetary policy outlook. Higher borrowing costs and elevated US Treasury yields have also weighed on investor risk appetite, making public offerings more challenging for prospective issuers.

According to Reuters, the deteriorating market environment has contributed to a slowdown in IPO activity over the past two months, with several companies postponing or withdrawing their planned listings.

Wearable health technology company Oura postponed its planned Nasdaq debut in September, citing volatilemarket conditions. Nuclear equipment maker Holtec Nuclear also withdrew its planned US IPO amid unfavourable sentiment in equity markets and the nuclear sector. Several other companies delayed their offerings during the same period.

Nasdaq recorded 167 new listings in the third quarter, compared with 205 in the year-earlier period, Reuters reported. The decline highlights the challenges facing the IPO market despite continued interest from companies seeking access to public capital.

Friedman said Nasdaq's listings pipeline remained strong and that the exchange was well positioned to support companies preparing to enter the public markets. However, near-term uncertainty continues to cloud the outlook for a broader recovery in IPO activity.

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Matt Kennedy, senior strategist at Renaissance Capital, an IPO-focused research and exchange-traded fund provider, said a significant rebound in listings before the end of 2026 appeared unlikely unless enthusiasm for artificial intelligence stocks returned strongly.

Kennedy added that although many companies were preparing for potential public offerings, an increasing number were shifting their timelines to 2027. Anthropic and the biotechnology sector are expected to be among the key areas of focus for the US IPO market in 2026, he said.

Meanwhile, Nasdaq reported quarterly earnings above analysts' estimates on Thursday. Its shares rose 6.7% in morning trading, Reuters reported, as investors responded positively to the company's financial results despite the softer outlook for IPO activity.

The strength of Nasdaq's long-term listings pipeline suggests that companies continue to view public markets as an important source of capital. However, economic uncertainty, geopolitical tensions and volatile investor sentiment could continue to influence the timing of new offerings in the coming months.


(Disclaimer: This article is based on inputs from agencies. These do not represent the views of The Economic Times)