Goldman Sachs CEO David Solomon has expressed optimism about the future of the IPO market. Speaking at a summit in Silicon Valley, Solomon predicted that the IPO drought is nearing its end. “It’s going to pick up,” Solomon said.
“It’s been slow, it’s been turned off.”
The tech IPO market has been quiet since late 2021 due to inflation and rising interest rates. Mergers and acquisitions in the tech sector have also been challenging due to strict regulations. However, Solomon noted a shift in sentiment and anticipates a boost in both IPOs and M&A activities.
“We have a more constructive kind of optimism, which always helps,” Solomon said. “Broadly speaking, I think it’s an improved business environment.”
Solomon mentioned that the election of President-elect Donald Trump and the Republican shift in Washington are already influencing the business world.
Solomon optimistic about IPO recovery
He pointed to a significant backlog from sponsors and a growing appetite for dealmaking, supported by a more favorable regulatory environment. Despite the stock market’s robust performance, IPOs have yet to see a significant rebound. Solomon noted some companies are poised to go public, such as a cloud software vendor that made a notable IPO in December and chipmaker NXP, which filed to go public in September.
While Solomon is bullish about the market’s prospects, he acknowledged structural challenges in going public. He pointed out that the number of public companies in the U.S. has dropped from roughly 13,000 twenty-five years ago to 3,800 today. Higher disclosure standards and an abundance of private capital make staying private an attractive option.
“It’s not fun being a public company,” Solomon admitted. “Who would want to be a public company?”
