Good Start for the US IPO Market, Preparing to Leap This Year

Smith Douglas Homes 14%↑ Successful Debut
Last Year ARM Also Cold... Expectations This Year
"Strong Fundamentals Amid Fed Rate Cut Possibility"

Smith Douglas Homes, the first company to go public on the New York Stock Exchange (NYSE) in 2024, successfully listed, raising expectations for the U.S. IPO market this year. Despite last year's cold market even with the debut of the major player ARM, the atmosphere has reversed with the new year.

On the 11th (local time), Bloomberg reported that Smith Douglas Homes closed the market at $24, up 14.29% from the IPO price of $21 per share.

Smith Douglas Homes raised approximately $161 million (about 211.6 billion KRW) through the IPO, with 7.69 million shares traded. The IPO was underwritten by JP Morgan, Bank of America, RBC Capital Markets, and Wells Fargo.

Bloomberg analyzed that Smith Douglas Homes' successful debut is a welcome signal for other companies aiming for IPOs this year. David DiPietro, Head of Private Equity at T. Rowe Price, said, "Successful IPOs of five to six mid-sized companies will help set the tone for this year."

Last year's IPO market saw attempts from British semiconductor company ARM and shoe manufacturer Birkenstock, but results were disappointing. Although ARM's stock price has risen compared to its listing price, it struggled last year after a brief surge on the first day of listing. Birkenstock suffered a humiliating 13% drop on its first day. However, with growing expectations that the U.S. Federal Reserve (Fed) will ease monetary policy again, there is optimism that the IPO market will regain momentum.

'China's Uniqlo' Shein and Finnish company Amer Sports, owned by China's largest sportswear company Anta Group, are also preparing to list on the U.S. stock market. Shein has applied for an IPO in the U.S., aiming to raise $90 billion (about 118 trillion KRW). If successful, it will become the largest Chinese company by market capitalization listed in the U.S. since Didi Chuxing. Amer Sports owns tennis legend Roger Federer's racket brand Wilson and outdoor gear brand Arc'teryx, with market valuations expected to reach up to $10 billion (about 13 trillion KRW).

Additionally, companies rumored to go public in recent years such as social media platform Reddit, the world's largest agricultural technology company Syngenta, and British private equity firm CVC Capital Partners are also being mentioned as potential IPO candidates this year.

Amid rising interest in cryptocurrencies following the approval of Bitcoin ETFs, Circle, the issuer of USDC?the world's second-largest stablecoin by market cap and the seventh-largest cryptocurrency?is also considering an IPO. Major foreign media reported that Circle Internet Financial secretly filed for an IPO on this day.

Bloomberg analyzed, "Investors are confident that the Fed is likely to cut interest rates quickly, with the S&P 500 index down only 1% from its all-time high," adding that "fundamentals for IPO returns are strengthening."

This content was produced with the assistance of AI translation services.