The Window Is Open
ARM filed their pricing range to go public this week. It’s going to be one of the biggest IPOs in the last year, and investors are starting to think about what that means for the broader IPO market: Is the window open for tech companies to go public again?
The question isn’t whether the window is open or not. The window is open.
The question is how wide the window is open.
That’s always the question. If the market is in an upward trend for several months in a row, which it has been all year this year, it’s open. But it may only be open a little bit, where only pretty high-quality companies can get out. The question is can the less high-quality companies, the more speculative companies, get out? That’s what we’re going to learn in the next couple of weeks depending on how these pricing events go.
ARM is getting a pretty rich valuation, which speaks to investor optimism around tech in general. I think that the real barometer for the IPO window for tech companies is going to be Instacart and Klayvio, which happen later this week.
ARM is a pretty mature company. It was previously a public company and taken private after SoftBank bought it in 2016 for $31 billion dollars. Instacart and Klayvio, however, are venture-backed companies. They went through the venture world, and I think the receptivity to them is going to tell us more about whether the window is really open for other later stage, venture-backed companies.