Goldman Sachs CEO David Solomon speaks at the Reuters NEXT conference in New York, the United States, on December 10, 2024.
Mike Fresh | Reuters
Goldman Sachs Chief Executive David Solomon said the years-long IPO drought is coming to an end.
“Things are going to get better,” Solomon said in an onstage interview Wednesday. Cisco CEO Chuck Robbins at a summit hosted by Silicon Valley Computer Networks. “It’s too slow and has been turned off.”
Solomon flew to California for the event immediately after his Wall Street banking reporting Fourth quarter results That beat analysts’ expectations, saying capital markets were broadly showing signs of life ahead of President-elect Donald Trump’s inauguration next week.
The tech IPO market has been largely dormant since late 2021, when tech stocks began to fall out of favor amid soaring inflation and rising interest rates. M&A in technology has been difficult as strict regulations limit the ability of the largest companies to grow through deals.
Solomon said market sentiment is changing and he expects strong momentum in mergers and acquisitions and initial public offerings.
“We have a more constructive optimism, which always helps,” Solomon said. He later added, “Broadly speaking, I think it’s an improved business environment.”
earlier that day, Solomon said Trump’s election and the return of Republican power in Washington are already starting to have an impact on the business community on company earnings calls. He noted on the conference call that “sponsors have a substantial backlog and there is an overall increase in deal interest, supported by an improving regulatory environment.”
Solomon’s comments came the same day the S&P 500 released his comments on a conference call and at a Cisco event biggest gain Since November, it has benefited from benign inflation reports and Goldman Sachs’ performance. Goldman Sachs shares rose 6% on Wednesday.
Despite two years of strong stock market gains, with the S&P 500 and Nasdaq hitting new highs last month, IPOs have yet to see a recovery. Cloud software provider Serve Titan debut Listed on Nasdaq in December, the first major venture-backed IPO in the U.S. since December scarlet letter April.
“After 2021, those values have declined, but people are coming back to those values,” Solomon said at the Cisco Summit.
Some companies say they are ready. chip manufacturer brain I applied for listing in September, but the process slowed down Due to review by the Committee on Foreign Investment in the U.S. Department of the Treasury (CFIUS). In November, online lending company Klarna explain The company has confidentially filed IPO documents with the SEC.
While Solomon is optimistic about what’s to come, he said there are structural reasons not to go public. He said that 25 years ago, there were about 13,000 public companies in the United States, but today that number has dropped to 3,800. The standard for public disclosure is higher, and there is now a lot of private capital available “at scale.”
“Being a public company is not fun,” Solomon admitted. “Who wants to be a public company?”
