Market Headwinds and Geopolitical Risks Muddle IPO Plans

The IPO market continues to struggle as companies rethink their strategy to go public before 2023 closes. High-profile IPOs in September and October have seen lower than expected returns, and continued economic and political turmoil both domestically and internationally create uncertain market conditions.

Partner Ro Sokhi said everything from higher oil prices to another potential interest rate hike from the Federal Reserve could contribute to the decision. "All these headwinds are definitely putting a downward pressure on companies evaluating an IPO," he said.

Another factor is the short time companies have left to file before the year-end. SEC rules require domestic companies going public based on their second-quarter financial statements to complete the offering by November 14. Compounded with a 15-day waiting period that precedes a roadshow, which lasts an additional week or longer, the IPO timeline is nearly a month after their public filing. "It's a very tight window," Sokhi advised. "If you don't get it in, maybe think about early 2024 at this point."

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