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Morgan Stanley predicts there will be an additional 10 to 15 tech IPOs in 2024, with even more expected in 2025.

Colin Stewart, the global head of technology equity capital markets at Morgan Stanley, anticipates a surge in tech Initial Public Offerings (IPOs) in the coming years. He mentioned in an interview on CNBC’s “TechCheck” that there could be 10 to 15 more tech companies going public by the end of 2024, with an even more promising outlook for 2025.

The IPO market experienced a significant slowdown starting in 2022 due to various economic factors like inflation and interest rate hikes. Many tech companies postponed their IPO plans amidst this uncertainty in the market. However, recent IPOs have shown positive signs with high pricing and strong trading performance, indicating a revitalized market for tech offerings.

In September, the IPO market saw a spark with the successful debuts of companies like Instacart and Klaviyo. Momentum further picked up with Reddit’s IPO, marking a significant event for the social media sector. Astera Labs, a data center connectivity chip company, also made waves with a successful IPO launch.

Morgan Stanley, a prominent player in the IPO space, led the Reddit and Astera Labs offerings, positioning itself for substantial fees. On the other hand, rival firm Goldman Sachs spearheaded the recent IPO of Rubrik, a data management software developer, which saw a 16% surge in its NYSE debut.

Stewart emphasized the importance of timing in IPO processes, suggesting that companies eyeing public listings might delay their plans to avoid clashing with the U.S. presidential election in November. He mentioned that current valuations in tech have pulled back from the peak levels of 2021, presenting a more stable environment for companies to consider going public.

While many high-value tech companies are yet to enter the public markets, the industry eagerly awaits the IPOs of SpaceX, Stripe, and Databricks, among others. Stewart expressed interest in taking these companies public but acknowledged the challenges they face with abundant private capital and a focus on future growth.

In conclusion, the tech IPO landscape is poised for significant growth and activity in the coming years, with Morgan Stanley and other major investment banks at the forefront of facilitating these public offerings.

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Insights from Stewart

Stewart shared valuable insights into the IPO market, noting the trends and factors influencing the tech sector’s public offerings. Stay informed about the evolving IPO landscape and its impacts on the technology industry with CNBC’s coverage.

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