Wall Street IPO activity plunges, investors start saying "no" to high AI valuations

Odaily News: Wall Street IPO activity has slowed to a trickle, with weak investor demand for new listings and market concerns over excessive valuations weighing on a quarter that had been expected to see a wave of offerings. Delays to the listings of Anthropic and OpenAI have also dampened sentiment in the U.S. equity capital markets. The head of equity capital markets at a major U.S. asset management firm said: "Nobody cares about any company other than Anthropic right now." Investment bankers' brisk business this year was largely driven by SpaceX's June IPO. But growing market concerns about a downturn in the AI industry and public opposition to data centers have caused the IPO market to dry up in recent weeks.

The banker added that investors are increasingly questioning the "detached from reality" valuations of companies tied to the AI investment boom. Data from BCA Research shows that shares of tech companies that went public this year have fallen by an average of about 23% since their first day of trading, further fueling concerns that banks underpriced deals too aggressively in order to win underwriting mandates. (Sina Finance)