The initial public offering market seems to be thawing – at least for now. A wave of activity occurred this week alone. On Tuesday, banking app Chime filed paperwork to go public on the Nasdaq . Less than 24 hours later, stock brokerage platform eToro had a successful public market debut . Shares closed up 29% in Wednesday’s session after pricing the IPO above its expected range. The developments have renewed optimism about a long-awaited pickup in IPO activity – something investors hoped to have seen by now, only for President Donald Trump’s aggressive trade policy to get in the way. That would bode well for Club holding Goldman Sachs’ crucial investment banking segment, which is core to our investment thesis in the stock. Over the past three years, investment banking has contributed somewhere between 15% to almost 19% of Goldman’s total non-interest revenues. Notably, Goldman was tapped as a lead underwriter for both of this week’s high-profile financial technology deals. “If you’re someone on the sidelines and you see what happened to eToro, don’t you say, ‘You know, maybe I want to get this deal done,” Jim Cramer said Thursday. “Maybe in this window before the summer we’re going to have some activity.” The IPO market has endured a rocky few years after the pandemic-era boom. Activity dropped off a cliff in 2022, with the amount of money raised by companies going public in the U.S. falling more than 90% from the prior year, according to consulting giant EY . The subdued environment largely persisted for the next two years, as higher interest rates and fears of a looming recession kept private companies on the sidelines. Uncertainty around the presidential election presented another barrier in 2024. But the floodgates were expected to reopen in 2025, with Trump returning to the White House and Wall Street expecting a roaring stock market and a more business-friendly climate overall. However, Trump’s hard-to-pin-down tariff policies throughout February and March rattled financial markets and weighed on IPO activity. And then Trump’s steeper-than-expected “reciprocal” tariff announcements on April 2 further upended Wall Street— and in response, multiple companies in the IPO pipeline reportedly paused their plans . Now, the tides seem to be turning once again, as trade tensions have cooled over the past month. Trump announced a 90-day pause on the “reciprocal” tariffs for most U.S. trading partners on April 9, except for China. But on Monday, the world’s two biggest economies agreed to temporarily suspend the triple-digit levies they had in place on each other’s goods. The stock market has rallied as tariff pressures have eased, and with this week’s gain, the S & P 500 erased all its year-to-date losses. Companies have been more “emboldened” to go public as a result of the trade developments, said Matt Kennedy, a senior IPO market strategist at Renaissance Capital. “Tariff-related volatility grounded IPO activity to a halt, and now we’re starting to see a few deals test the waters,” Kennedy told CNBC in an email Wednesday. Kennedy pointed to eToro, as well as forthcoming initial public offerings from digital health companies Omada and Hinge Health. Omada filed to go public May 9, while Hinge Health’s initial prospectus was submitted in March. On Tuesday, Hinge said it planned to raise up to $437 million in its IPO. “We’ve come a long way since the dark days of early April,” Kennedy said. Indeed, in a sign of that progress, eToro was among the companies that reportedly delayed its IPO plans in early April. Shares of Goldman struggled between mid-February and early April, as investors recognized that the heightened market volatility could dampen dealmaking. But they’ve been on fire as tariff fears have subsided, rallying about 33% since April 8. The S & P 500 has advanced almost 19% in the same stretch. GS YTD mountain Goldman’s year-to-date stock performance. The stock market’s stabilization needs to continue for there to be a material rebound in IPOs, according to Mark Schwartz, who leads consulting firm EY’s IPO and SPAC advisory practice. “We don’t need to continually hit another all-time and another all-time high. We need stability in the market,” Schwartz said in an interview Thursday. “If absolute levels [and] valuation multiples stay relatively static, [I’ll] feel good about it.” He added, “If we have that as a backdrop, I feel like there’s so much supply that’s wanted to go to market for so long, that we could see a robust 2025.” Goldman’s president and chief operating officer, John Waldron, offered a similar assessment in a CNBC interview last week , even before the China tariff relief arrived. “I think we can actually get back to a reasonable capital markets level of activity because … the backlog and pipeline remains very, very strong,” Waldron said. “I think there’s fundamental demand for those capital markets transactions with a little bit more of a certain backdrop.” In the same interview, Waldron suggested that mergers-and-acquisitions activity might be quicker to rebound than IPOs, saying he thought “M & A is healthier.” Already, a few notable takeovers have been announced in May after the number of M & A deals being signed plummeted in April . Skechers agreed to be taken private by 3G Capital in a $9.4 billion transaction. Coinbase bought a crypto derivates exchange, Deribit, for $2.9 billion . And, most recently, Dick’s Sports Goods on Thursday announced a $2.4 billion deal for Foot Locker — with Goldman both advising Dick’s and providing short-term funding to complete the transaction. Despite the current pent-up demand for IPOs, some dealmaking experts have a more cautious view on that part of the investment banking business in the longer term. Jay Ritter, an emeritus finance professor at the University of Florida and renowned IPO expert, said that in general, fewer companies are choosing to go public than in decades past. From 2001 to 2024, an average of 114 operating companies went public each year, according to Ritter’s data, which excludes certain IPOs such as those with offer prices less than $5. That is down significantly from the annual average of 310 between 1980 to 2000. “We’ll always have some IPOs,” Ritter acknowledged, but he said it’s a lot easier for startups to stay private these days. “Private markets have developed in a manner that the motivations for going public aren’t as strong as they used to be,” Ritter said. “There’s lots of venture capital money available and mutual fund money as well for financing startups that are relatively mature. A company with good prospects can raise hundreds of millions of dollars in the private markets without needing to go public.” (Jim Cramer’s Charitable Trust is long GS. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. 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EToro Group Ltd. signage ahead of the company’s initial public offering outside the Nasdaq MarketSite in New York, US, on Thursday, May 15, 2025.
Yuki Iwamura | Bloomberg | Getty Images
The initial public offering market seems to be thawing – at least for now.
