The IPO Market Heats Up for 2025 With Red-Hot Deals on the Way

Investing

Published: January 9, 2025 6:16 am

An initial public offering, or IPO, is the term Wall Street uses for the first time a private company sells shares of its stock to the public on one of the major stock exchanges. The event means that the company has made the transition from being privately held, often by private equity companies, to public ownership. That is why an IPO is frequently called “going public.”

24/7 Wall St. Key Points:

After lowering interest rates three times in 2024, Wall Street feels the Federal Reserve will only lower rates twice again in 2025 as inflation remains sticky.
That could mean no additional rate cuts until May as Chairperson Powell and the Fed governors weigh the incoming data.
Some solid deals like ARM Holdings PLC (NASDAQ: ARM), Kenvue Inc. (NYSE: KVUE), and Birkenstock Holdings PLC (NYSE: BIRK) came to market over the past few years
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The rise in rates after inflation exploded in 2022 put a significant damper on the IPO market that year and in 2023. Some deals made it, but the overall volume was very low. Last year was better as deal volume jumped 60% against the 2023 print. However, only 10 deals over the past three years have raised more than $1 billion. While between 2010 and 2020, an average of 15 deals annually raised that amount.

We checked the Renaissance Capital IPO website, looking for deals set to kick off in 2025, and there is not much for investors to get excited about yet. Flowco Inc. (FLOC) is offering 17.8 million shares at $21 to $23, and it is looking to raise $392 million, with J.P. Morgan and Jefferies as the lead banks for the oilfield services company. The only other deal of any size is a blank check company deal for Cantor Equity Partners 1, which raised $200 million by selling 20 million shares at $10.

As Bloomberg reported earlier this week, this could all be about to change. A ton of paperwork on some blockbuster new deals that could prove to be some of the biggest IPOs for 2025 has been rolling in since late December. They noted that many companies are preparing to hit the IPO tape. Some will be well over the $1 billion mark, which has been highly anticipated for some time. The Bloomberg article went on with more details:

The latest came Monday when Smithfield Foods Inc. filed for an initial public offering (IPO). Bloomberg News reported earlier that an IPO for the world’s largest pork producer, acquired by a Chinese company in 2013, may raise $1 billion or more. Several others snuck in before the 2024 calendar flipped over, such as Venture Global Inc. — one of the biggest suppliers of liquefied natural gas in the US — whose IPO could raise more than $3 billion, people familiar with the matter have said. Also in late December, medical supplies firm Medline Inc. and fintech startup Chime Financial Inc. submitted key paperwork with US regulators for potentially sizable first-time share sales.

We screened the IPOs that Wall Street has been salivating over in anticipation of their arrival, and some could be absolutely out-of-the-park home runs. Here are just some of them:

Discord. With a $15 billion valuation, this company, which is big with gamers, turned down Microsoft Inc.’s (NASDAQ: MSFT) $10 billion offer in 2021.
Coreweave. With a 2024 Q2 valuation of $35 billion, this AI and high-performance cloud platform stock could be red-hot as it seeks to raise $3 billion.
Netsope. This one offers cloud security innovation and has a value of about $7.5 billion. Wall Street sources say this could be a second-half 2025 offering.
Databricks. With a $62 billion valuation, this is an AI and data analytics play that could debut in early 2025.
Klarna. This is one highly anticipated deal in the fintech sector. This Swedish company is a leader in the buy-now-pay-later sector with a $14.6 billion valuation. It reportedly has 85 million customers and 600 partners.
Revolut. Here is another red-hot buzz deal, an app that offers fintech services from currency exchange to cryptocurrency trading. This could be a massive winner with a reported $45 billion valuation.
PicPay. This is a financial platform in Brazil with 65 million users.
Shien. And this is a sizzling deal that may list on the London Stock Exchange.

It is important to remember that all of these offerings, especially the super-sizzling AI and cloud companies, will be in huge demand. Of course, the biggest accounts at the biggest firms will get the lion’s share and the biggest allocations. That noted, this is the lineup for 2025 so far. It never hurts to put in for shares, and they, of course, will all be available in the aftermarket when trading begins.

Four High-Yield Stocks With 7% and Higher Dividends Are 2025 Home Runs

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