US IPO Weekly Winners & Losers

Could a groundbreaking social media platform and an innovative chipmaker be the key to unlocking the tech IPO stalemate?

Reddit (NYSE: RDDT) and Astera Labs (Nasdaq: TBD) became the first major IPO filings in over a month, and the first large tech filers this year. Watch for listings in mid-March.

The new filings coincide with the end of the seasonal lull, and a strong rally in tech stocks. Naturally, both companies pitch an AI angle. Reddit plans to sell its data to help train AI, while Astera's chip products allow the high-throughput data transfer needed to power AI applications.

Which sounds more like Nvidia to you? Astera looks like it can be a key player in AI infrastructure, and you don't need to squint too hard to see it matching the >40x sales multiple it got in its 2022 financing round.

Meanwhile Reddit has more of an uphill battle. It'll need to convince investors that it's more like Meta than Snap. Reddit can point to rising user metrics, decent ad growth, and strides towards profitability. And yet, a lot should come down to valuation, which looks like it'll be closer to 6-7x sales.

These deals are just the beginning of a tech revival in the coming months, with a handful of software names eyeing IPOs in Q2. Stay tuned.

One micro-cap uplisted from the OTC this week, China-based Wetouch Technology (Nasdaq: WETH); it finished below issue. More small deals are tentatively scheduled to close out February. Storied automaker Lotus Technology (Nasdaq: LOT) listed on Friday after completing its SPAC merger, the largest in six months (97% redemption rate).

The IPO Index stumbled -3.4% this week, compared to the S&P 500's +1.7% gain. Eyecare company Bausch + Lomb jumped +23.0%, while EV maker Rivian slid -38.2%, both on earnings news.