Summary
- It reported that last year's US IPO market investment performance lagged the S&P 500 index's gains.
- It said that weak share performance of crypto and AI listings pulled down overall IPO market returns.
- It analyzed that investors are increasingly taking a selective, fundamentals-focused approach.
Last year, the investment performance of the US initial public offering (IPO) market was reported to have lagged the major stock index Standard & Poor's (S&P) 500. Analysis says that weaker-than-expected listing performance by crypto (cryptocurrency) and artificial intelligence (AI)-related companies pulled down overall returns.
On the 6th, crypto-focused media Cointelegraph reported that the stock prices of companies that listed on US exchanges last year rose by a weighted average of 13.9%. This was below the S&P 500 index's 16% gain over the same period. Closed-end funds and special-purpose acquisition companies (SPACs) were excluded from the tally.
Last year saw major crypto industry firms go public one after another. After President Trump took office, regulatory uncertainty eased somewhat, prompting Wall Street to provide funding to crypto companies, but not all listed companies delivered results. AI-related companies also had numerous cases in which post-listing share price performance was disappointing compared with expectations.
Among crypto firms, the listing of stablecoin issuer Circle Internet Group is cited as a representative success case. Circle went public in June last year in a deal worth $1.05 billion, with an IPO price of $31, and its stock jumped 170% on its first day. However, as Bitcoin's price corrected after its October peak, Circle's stock also fell and by year-end was below the first day's closing price.
In contrast, crypto exchange Gemini was classified as one of the worst-performing stocks since its September listing last year. It started at an IPO price of $28 but was down more than 60% by year-end. Bullish, which listed in August, also saw its stock return to the IPO price level after an initial first-day surge.
Investment in AI-related companies was also volatile. Data center developer Fermi and AI-based cost management platform Navan, among others, failed to meet market expectations after listing and saw weak share prices.
Mike Bellin, head of PricewaterhouseCoopers (PwC)'s US IPO practice, said, "2025 was generally a mixed year," and assessed that "as the market opened selectively, standards for early-stage technology companies were raised significantly." He added, "The biggest characteristic is the return to a 'fundamentals-driven market' in which investors approach with greater selectivity."
