US IPO Weekly Winners & Losers

The Fed lowered interest rates for the first time in four years, with a jumbo half-point cut. Why is it an important catalyst for the IPO market?

The first reason is valuation. A lower risk-free rate makes future cash flows relatively more attractive, and most IPO candidates are valued on future earnings.

The second is psychological. The IPO market can be robust when rates are elevated, but many companies had pointed to interest rate policy as a good enough reason to delay. Now we’re officially in a rate-lowering environment.

The companies that go public are often trailblazers. But when it comes to the actual IPO itself, they like to follow the herd. Why be the guinea pig when a startup can just wait until every IPO is popping?

In the same way, we can see the IPO market’s “AI Revolution” on the horizon, but it won’t arrive in full force until a solid group of new AI stocks deliver breakout returns.

Three sizable deals joined the calendar for next week, all set to trade on Thursday. Natural gas producer BKV (NYSE: BKV) will be an important test for other oil & gas companies in the pipeline. Biotech BioAge Labs (Nasdaq: BIOA) is studying the biology of human aging to develop a therapy that enhances popular weight-loss drugs. Last, Guardian Pharmacy Services (NYSE: GRDN) has carved out a niche serving long-term care facilities.

The US IPO market rose +1.3% this week, a hair below the S&P 500, up +1.4%. Eyecare giant Bausch + Lomb saw its stock jump +28.4% on news that it’s exploring a sale. Kazakhstan-based fintech Kaspi.kz erased most of its post-IPO gains, down -21.7% after a short report alleged its growth is unsustainable.