A top Citigroup banker reportedly said that a handful of tech companies are considering going public on U.S. exchanges before the end of the year and that they could benefit from demand for high-growth stocks.
Paul Abrahimzadeh, co-head of equity capital markets for North America at Citigroup, said last week that investors see high-growth stocks like those of the tech companies as being more resistant to economic slowdowns and more likely to benefit from lower interest rates, Bloomberg reported Tuesday (Sept. 10).
Abrahimzadeh’s comments come at a time when some bankers expect little initial public offering (IPO) activity during the last months of 2024 because of the effects of the U.S. presidential election, signs of an economic slowdown and uncertainty about when the Federal Reserve will start cutting interest rates, according to the report.
“The reality is there’s no lack of demand for new issues,” Abrahimzadeh said in the report. “Growth is back en vogue and that will only accelerate as rates go lower.”
It was reported Aug. 27 that bankers and executives were holding out hope for 2025, as the IPO market rebound they had hoped for hasn’t been realized in 2024.
Amid recent turbulence in the stock market, worries about the economy and uncertainty about the presidential election and the Federal Reserve’s interest rate decision, companies have been postponing their IPOs.
Clay Hale, co-head of equity capital markets at Wells Fargo, told the Wall Street Journal in a report posted Aug. 27 that the idea that next year could make a comeback for IPOs has been “singing in the chorus” since spring and that market volatility appears to have erased optimism that the market would pick up at the end of this year.
“It’s really hard to plan to do deals in the fourth quarter unless you know the market is great,” Hale said, per the report.
There has been a long drought in venture capital (VC) fundraising, which saw a drop from $191 billion in 2022 to $82 billion in 2023. This year’s total is expected to fall even further, the Financial Times reported Sunday (Sept. 8).
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