US Banks Suffer As IPO Pipeline Dries Up Due to Volatile Markets: FT

The leading U.S. investment banks Morgan Stanley (NYSE:MS), JPMorgan Chase & Co (NYSE:JPM), Bank of America Corp (NYSE:BAC), Goldman Sachs Group Inc (NYSE:GS), and Citigroup Inc (NYSE:C) took a $4.6 billion revenue hit from the IPO freeze due to the recent market volatility, the Financial Times reports.
There was not a single IPO between February 17 and March 14 in a year that expected Reddit, Instacart, and Stripe to launch their IPOs.
Only PE firm TPG raised over $250 million in an IPO in 2022 versus 43 in the first 13 weeks of 2021, excluding SPACs.
FT reports the banks generated a cumulative $645 million from equity capital market fees, year to date in 2022 compared with $5.3 billion YTD in 2021.
Industry-wide ECM fees plunged over 75% year on year at $2.7 billion, beating expectations.
The rising interest rate expectations, market volatility caused by the war in Ukraine, and dismal post-listing performances by multiple highest-profile listings, like EV maker Rivian Automotive Inc (NASDAQ:RIVN), played a crucial role behind the IPO freeze, FT noted.
Price Action: MS shares closed higher by 1.05% at $94.85 on Friday.
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