00:00 Speaker A
So let’s talk about next year. Why do you think it’ll be even stronger than this year?
00:03 Speaker B
Yeah, you know, I think uh next year really if you look at the report card for 2025 IPOs, it was mixed and I think it’s a barometer looking at 2026.
00:13 Speaker B
In terms of quantity, Conor Group were giving an A in terms of the number of deals out there. Best IPO market since 2021. Um and you’re also seeing a 50% increase uh from last year from 2024.
00:26 Speaker B
In terms of of sort of the mix of IPOs out there, uh it’s sort of a B- grade, right? You saw SPACs are back. 40% of the IPOs were SPACs. You also saw private equity really jumping into the fray.
00:39 Speaker B
The C grade I’m going to give to sort of the performance around pricing, right? You know, that that’s and that’s what we’re all talking about, right? A lot of companies, uh only 51% of the companies that went public in 2025 are actually trading above their IPO stock price.
00:58 Speaker B
Now, your question for for how we feel about 26, you’re seeing really good forecasts from the major banks around the S&P uh performance for next year.
01:08 Speaker B
Morgan Stanley’s at 16%, Goldman Sachs is 11%. You have 1500 private company unicorns really looking to go out there. and we’ve had four quarters in a row of really good uh earnings guidance from uh from this S&P 500.
01:25 Speaker B
So I think a lot of tail wins to take us into 26.
01:28 Speaker A
Do you think that um, I mean and historically you can tell me if this tends to happen, do you think that the companies that are coming public will learn the pricing lessons of 2025 and price things more appropriately next year, um so that they won’t end up being below IPO price?
01:49 Speaker B
Yeah, you know, there’s a lot of calculus that goes into it because you have your uh recommendations from your your investment bankers, you have your board of directors. Um I think the key is going to be trying to find that sweet spot, right? It’s an art and a science to price an IPO.
02:08 Speaker B
I think for most companies, they’d like to sort of leave some money on the table, uh so that way they can sort of have a good pop in the performance and then make sure they can kind of beat and raise in their forecast thereafter.
02:20 Speaker B
If you miss your estimates, you’re in the penalty box for a while. So I think you don’t want it where your investors are unhappy within that first six to 12 months of of a company going public.
02:32 Speaker A
Um, this year really has felt dominated by sort of Fintech and crypto IPOs. What do you think next year? Is next year still going to be the year of the crypto IPO?
02:44 Speaker B
Yeah, you know, I would say uh AI, Fintech, um uh uh the infrastructure plays, and even energy are really sort of hot sectors right now.
02:57 Speaker B
The other ones we’re going to see coming to online in 26 will be software and SaaS and B2B and B2C. And the reason is they are uh weaving in AI to their business stories. So you don’t have to be the pure play AI. It’s actually how do you make your core business uh organically have AI as a way to scale and build volume, drive revenue and drive profitability.
03:22 Speaker B
So I think you’re going to see AI woven into all these stories, but the investors want to make sure that it’s in a real way that’s sort of true to the business.
03:31 Speaker A
What do you think the hottest IPO of 26 will be?
03:34 Speaker B
You know, I’d say there’s probably five or six that would be on our radar. There’s a databricks, uh there’s a a a stripe, a plaid, uh Cerebras, Kraken. Um, you know, I think there’s some really good companies that I would call sort of the uh uh the IPO Olympic uh sort of gold medal type of of companies out there.
03:57 Speaker B
Um we’re also going to see a really big wave of sort of uh mid-cap and small cap companies as well. These are the ones that have been in the IPO gym preparing for the past 12, 24 months. and specifically when the pendulum opens up, those can be some really quality companies that to your comment, they’re not going to overprice, they’re going to want to go out there, leave some money on the table, but give really good performance to the retail investor.