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Over the past year, Wall Street has seen a steep decline of investment banking revenues and overall dealmaking as the number of initial public offerings has fallen well below the pandemic boom. In light of these trends, big banks are looking to an unusual source to break the cycle: Kim Kardashian and her company, Skims.
The main issue, according to Partner Ro Sokhi, is that although there are plenty of healthy, IPO-capable companies, no one wants to be the first to market. He theorized once a company pushes a deal through, it will pave the way for all the others to follow
“There are still an incredible number of companies that are looking to go public,” said Sokhi. He pointed out Cava, the Mediterranean fast-casual restaurant chain, as an example of a company that recently went public and did well. With an encouraging 27% stock increase since its IPO in spring, Sokhi said it helped foster some green shoots throughout the market.
“There’s currently a feeling of cautious optimism,” he said.
In the case of Skims, a successful IPO would be a big sign the market is ready for the floodgates to open. “Companies, CFOs and investors in general will see this as a very positive sign,” said Sokhi. “It will signal to investors that there’s an opportunity here for an exit or an IPO. That’s what we saw in 2021 — a gangbusters year for dealmaking that could potentially be echoed this year.”
Read the full article published by CNN.
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