IPOh Yeah!

No matter how you cast your ballot in the presidential election last month—for the Democrats, the Republicans, Greens, or the transcendental meditation-focused Natural Law Party—recent history suggests your vote counts for initial public offerings.

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EY analysts tallied data from the previous five presidential election years as part of their annual IPO review — 2004, 2008, 2012, 2016, and 2020 — and found the average US IPO volume was 130. In other words, that's roughly how many companies were willing to test the waters on public markets with America's immediate political future in the balance.

But what about the five years — 2005, 2009, 2013, 2017 and 2021 — immediately after those election years? The average US IPO volume was 194, a roughly 50% increase. Nothing like the clarity of an election result, no matter the victor, to give executives one less variable to worry about.

And that's where markets stand now.

This year, a host of favorable economic trends — interest rates slashed at home and abroad, a bull market run that touched dozens of record peaks, an AI-boom that's opened up a whole new burgeoning sector — had already unleashed something of a revival in a previously sluggish global IPO market.

With another Federal Reserve interest rate cut of 25 basis points announced last week — the third cut since September — and a new administration set to take over in late January, the odds that a host of new ticker symbols will enter the Wall Street lexicon in the next 12 months are through the roof.

Here is a look at how the IPO market did in 2024 and how its latest momentum might push into the next quarter of a century.

An Offer You Can't Refuse

IPO volumes slumped after the Federal Reserve hiked interest rates in 2022 to tamp down rocketing inflation, in the process jacking up the cost of debt capital for many companies.

But the unwinding that began in September, with the first rate cut in four years bolstered by a surging S&P 500 (which has gained 28% on the year), turned that trend upside down.

There were 68 IPOs across the Americas, including the US, in the fourth quarter of this year, compared to 48 in both the second and third quarters, for example, a testament to how central bank cuts at home and abroad unleashed a wave of enthusiasm.

The US alone saw 183 IPOs this year, a 44% year-over-year increase from 2023, and led the world in proceeds — aka the money generated from those offerings — for the first time since 2021, with a $32.8 billion haul marking a 47% improvement from last year. That's according to Dealogic and S&P Capital IQ data collected by EY.

"Year to date through September, we raised as much capital in the U.S. markets as we had in 2022 and 2023 combined," Lynn Martin, the New York Stock Exchange president, said at a Reuters NEXT conference in New York earlier this month. "That's setting up really well for 2025."

The largest US IPO this year was Lineage, the real estate investment trust that specializes in temperature-controlled storage warehouses, which listed on the Nasdaq.

Cloud-based healthcare payments company Waystar and chipmaker Astera also made big entrances on the tech-leaning index — in a year when artificial intelligence soared and health and life sciences roared back.

In fact, the Nasdaq saw 139 IPOs raise a combined $17.2 billion in proceeds this year, topping the 43 listings on the New York Stock Exchange, which raised a combined $15.6 billion.

That's not incredibly surprising, given the NYSE is home to more traditional blue chip and industrial companies, while the Nasdaq is where internet, biotech, and companies in emerging sectors more often go to list.

It can also produce more volatility — Lineage's shares are down 25% since its July IPO as a slowdown in consumer spending has meant less demand for cold storage, for example, while Waystar is up 75% since its IPO the same month. Astera, riding the chips boom, is up over 100% since it started trading in March.

A Surprising First Place

The returns on Waystar and Astera were indicative of just how solid American listings have been as investments this year.

According to EY's analysis, the average return for US companies that debuted in 2024 is 46%, bested only by the 123% in mainland China and the 48% in Malaysia. Both had considerably fewer IPOs than the 183 in the US, with 98 in mainland China and 49 in Malaysia.

That return is also well in excess of 34% for the Nasdaq and 28% for the S&P 500.

The healthy returns made a killing for private equity and venture capital — EY estimates portfolio companies were responsible for 46% of IPO proceeds around the world this year. Notably, of the 18 unicorn IPOs listed this year — that's companies worth $1 billion or more — half were launched by venture capital firms, compared to a miserly three last year.

Propelling the US in particular was growth in the health and life sciences sector, which can often be hit harder in times of high interest rates because R&D costs surpass those of other sectors. The US saw 44 health and life science IPOs in 2024, the most in the world, and besting the Chinese mainland's 4, Japan's 9, and Hong Kong and Europe's 10 combined.

The second most active in life sciences was India, where there were 19 IPOs. And, in a notable surprise, the land known as Bharat in Hindi was actually the place where the most IPOs in the world happened this year: India saw a staggering 327 companies list (it was second to the US in IPO value, producing $19.9 billion in proceeds, and fifth in return, with its companies generating a healthy 37%).

This marks the first time India has led the world in IPO volume. Like the US, the country's investment climate has been bolstered by a robust market performance, encouraging listings — the blue chip NSE Nifty 50 is up over 11% this year.

There is nevertheless little doubt that the US remains the world's most alluring market. Cross-border listings —when a company trades on its home country's stock exchange as well as a foreign exchange — rose to 113 this year, up from 83 in 2023. The US was the destination country for a staggering 101 of them (the 33 Chinese mainland firms led those that listed in the US from abroad, followed by 28 from Hong Kong, 16 from Singapore, and four from Australia).

Who's Next?

With the incoming Trump administration suggesting it will launch a series of regulatory changes accommodating to Wall Street — albeit with the caveat of threatened tariffs that could disrupt economic activity — indicators suggest 2025 could top this year's rebound.

The Nasdaq IPO Pulse Index, a forecast of US IPO activity in the next six months, touched a three-year high in October, implying a sustained run of listings in the short term.

"Given this pivot toward rate cuts in major economies, lower rates should act as a tailwind to IPO activity in major markets around the world," Nasdaq's chief economist, Phil Mackintosh, said that month.

There's reason for caution, however: The Federal Reserve said it is now forecasting just two interest rate cuts in 2025, half of its previous projection.

That will weigh on decision-making at several prominent companies — Stripe, Klarna, Instacart, SpaceX, and Reliance Jio, to name a few — that are rumored to be settling on the four letters that would identify them to traders.

More than half of IPOs next year will come from the telecom, industrials, and health and life sciences sectors, EY analysts estimate.

To what extent this year's frenzy continues, of course, will depend on the economy remaining resilient and stalled inflation returning to a more pronounced downward trajectory — those macro determinants will influence decisions by the Fed and central banks on whether to cut, or not cut, rates even more in 2025.

In other words, Groundhog Day will forecast when to expect the end of winter. The Fed's March 19 and 20 meeting will forecast whether to expect an IPO summer.

Written by Sean Craig

No amount of holiday cheer can keep your credit card points safe from the Credit Card Competition Act (CCCA). While big retailers are celebrating, this legislation could leave you without the points, miles, and cash back you've worked hard to earn.

Thankfully, you can help stop this proposed legislation in its tracks. By signing this petition, you're letting Congress know that your rewards matter. Whether it's saving for that dream vacation, holiday gifts, or just easing your everyday expenses, your points are more than perks–they're a financial tool. 

Don't let Congress take them away. It only takes a moment to act, but it could save you years of rewards.

Sign the petition to protect your points.