Anthropic Stands Alone as Rest of US IPO Market Slows to a Crawl

(Bloomberg) -- A cocktail of risks is threatening to stall the US IPO pipeline, leaving Anthropic PBC's potential blockbuster debut as one of the few offerings that investors can count on.

Several deals have already come unglued, with smart-ring maker Oura Inc. and Bamboo Insurance Services Inc. postponing their plans as interest rates climbed higher and the Iran war dragged on. High-profile candidates SB Energy Inc. and Nscale Ltd. have filed publicly but haven't yet started formal marketing, further muddying the fourth quarter outlook.

Even with some deals falling by the wayside, equity capital markets bankers will be celebrating one of their best years ever for fees. Anthropic is seeking to match or exceed SpaceX's record-setting debut as soon as next month, in a listing that would dwarf all of the other potential deals combined.

Bankers concede that marketing IPOs has become much harder due to factors including the upcoming midterm elections, and investors are more choosy.

"This is the first time this year that there has been a bit of a pause in the IPO market where folks are saying, 'There's got to be a little bit of differentiation in terms of how we evaluate what we buy and at what price'," said Aloke Gupte, Citigroup Inc.'s co-head of global equity capital markets.

It doesn't help that the end-of-year calendar is trickier than normal due to the Nov. 3 midterm US elections, where AI safety and data centers have become part of policy debates.

"When you look at the US political landscape and geopolitics overall, the number of unknowns has gone up over the past six weeks alone," said David Bauer, JPMorgan Chase & Co.'s head of equity capital markets for North America. "That increase in uncertainty inevitably has an impact on how the market is going to behave."

A warning for the market sounded in September, with IPO activity slowing as US 10-year bond yields jumped more than 50 basis points. Only five sizable companies went public, raising $1.9 billion, according to data compiled by Bloomberg, making it the slowest month since March.

That's in stark contrast with the picture for the year to date, bolstered by SpaceX and South Korean memory chipmaker SK Hynix Inc.'s listings.