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Reddit, Galderma Fire IPO Starting Gun. Now Investors Want More

Mar 29, 2024 - businessoffashion.com
The IPO market is showing signs of revival with Reddit Inc., Astera Labs Inc., and Swiss skin-care company Galderma Group AG going public last week, leading to a surge in their stock prices. However, the sustainability of this trend is uncertain, with experts suggesting that the market needs to maintain a stable macro backdrop and sellers need to feel they are getting a fair valuation. The market also saw the busiest week for US and European IPOs since September, raising $5.5 billion.

Despite this, the IPO market recovery is uneven globally. While the Persian Gulf is seeing strong investor interest, the Asia Pacific region has seen a decline in IPOs. The market is also witnessing a shift in focus towards companies related to artificial intelligence, with Reddit and Astera Labs incorporating AI into their pitches. However, experts caution against drawing conclusions from the initial success of these companies, emphasizing that an IPO is just the beginning of a company's journey.

Key takeaways:

  • Last week saw a potential revival in the IPO market with successful public offerings from Reddit Inc., Astera Labs Inc., and Galderma Group AG.
  • Despite this, some experts believe a broad reopening of the IPO market is still a few quarters away and investors will continue to evaluate deals on a case-by-case basis.
  • Artificial intelligence is driving much of the current IPO action, with companies incorporating AI into their pitches to attract investors.
  • Private equity firms are under pressure to return capital to their investors, and the success of recent IPOs could encourage more firms to bring their companies to market.
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