Goldman Sachs CEO Predicts End to Multi-Year IPO Drought
Goldman Sachs CEO David Solomon predicts an end to the multi-year IPO drought, citing signs of a improving business environment and an increased appetite for dealmaking. Speaking at a summit hosted by Cisco in Silicon Valley, Solomon stated that “it’s going to pick up,” referring to the tech IPO market, which has been dormant since the end of 2021.
Solomon’s optimism is based on a changing mood in the capital markets, with signs of life ahead of President-elect Donald Trump’s inauguration next week. The tech IPO market has been sluggish due to rising inflation and interest rates, while mergers and acquisitions have been challenging in technology due to tough regulations.
However, Solomon believes this is about to change, with broad optimism leading to increased dealmaking and IPOs. “We have a more constructive kind of optimism, which always helps,” he said. He also noted that there is a significant backlog of sponsors and an overall increased appetite for dealmaking supported by an improved regulatory backdrop.
Despite his optimism, Solomon acknowledged that there are structural reasons not to go public, including higher standards around disclosure and the availability of private capital at scale. “It’s not fun being a public company,” he said.
The news comes as Goldman Sachs released its fourth-quarter results, which blew past analysts’ estimates. The company’s stock popped 6% on Wednesday, while the S&P 500 posted its biggest gain since November.