Trump's reciprocal tariff war disrupts the market, forcing multiple US stock IPO plans to be suspended.

The series of tariff policies from the Trump administration has disrupted the global financial market, and several companies have suspended their IPO plans for the US stock market. The IPO market, which had just shown signs of recovery, is now facing a “freeze” again.

According to insiders, affected by market turmoil, several companies at different stages of their IPO plans, including digital payment company Klarna, medical supplies manufacturer Medline, and trading platform eToro, have paused or reconsidered their plans.

Klarna’s IPO journey, having just become Walmart’s exclusive “buy now, pay later” service provider in the U.S., has garnered significant attention. The company officially submitted its listing application to the U.S. Securities and Exchange Commission (SEC) on March 14, and originally planned to launch its investor roadshow next week with a valuation of $15 billion, but according to sources, this event has been postponed. Similarly, ticketing company StubHub and trading platform eToro, which also planned to start their roadshows next week, have delayed their respective plans.

Medical supplies manufacturer Medline planned to publicly file application documents with the SEC earlier this week, but its IPO plans have reportedly been indefinitely delayed. The company was acquired in 2021 by private equity firms Blackstone Group, Carlyle Group, and Hellman & Friedman for $34 billion, marking one of the largest leveraged buyouts in history.

Fintech company Chime was originally scheduled to publicly submit its financial report to regulators, but it has reportedly delayed this move and its IPO plans. Additionally, sources say that virtual physical therapy company Hinge Health is expected to go public at the end of April, while cryptocurrency company Circle Internet Financial has also been planning to list; both companies have recently stated that they are “monitoring the market.”

The Trump trade war has severely impacted the IPO market.

After the Federal Reserve began its rate hike cycle, the U.S. stock IPO market has experienced a three-year slump due to factors such as geopolitical risks and tightening industry regulations. Subsequently, amid expectations that the Trump administration would relax regulations or cut taxes, as well as the Federal Reserve’s rate cuts since last September, the market widely anticipates that IPOs will rebound in 2025.

For example, with the help of Nvidia, cloud computing provider CoreWeave recently completed the largest technology company IPO in the U.S. since chip manufacturer Arm Holdings went public in September 2023, and began trading on Nasdaq last week.

However, the series of tariff policies by the Trump administration disrupted this momentum.

On the 2nd, U.S. President Trump signed an executive order imposing a reciprocal tariff starting at 10% on goods imported from other countries and regions, raising investors’ concerns about the escalation of the trade war and the risk of a global economic recession.

As a result, U.S. stocks fell for two consecutive days. The S&P 500 fell more than 10% in two days, its biggest two-day drop since the start of the pandemic in March 2020, while the Dow and Nasdaq also fell 9.3% and 11.4%, respectively. The CBOE Volatility Index (VIX), known as the “fear index,” closed at a four-year high.

“The market’s intense reaction is reasonable.” said Jeremy Abelson, founder and portfolio manager of the fund company Irving Investors. “In this environment, it is irresponsible for companies to enter the market.”

According to reports, an executive in the IPO industry stated that they expect all listings to be postponed for at least two weeks, and given the market turmoil, companies are unlikely to initiate investor roadshows.

Still cautiously optimistic about the IPO market.

The recent market turbulence may lead some investors to reassess their expectations for the 2025 IPO market, but the IPO filings indicate that issuers still maintain a cautiously optimistic outlook for the coming year.

According to KPMG statistics, as of March 10, 2025, the amount raised by US listed IPOs reached $9.22 billion in the first quarter, a 7% increase from $8.63 billion in the fourth quarter of 2024, but still far below the peak of $133 billion in the first quarter of 2021. The number of IPOs in the first quarter of 2025 was 59, down from 76 in the fourth quarter of 2024.

Shari Mager, Head of U.S. Capital Markets at KPMG, stated: “The IPO market got off to a good start this year, but market activity declined significantly in March as tariffs and market adjustments closed the IPO window for many companies.”

“We need to see the tariff issues become clearer and the market settle down in order to open another IPO window before summer,” Mag said. “There are many companies looking to go public.”

Some companies are waiting to restart their listing plans after the market stabilizes. According to insiders, Klarna still plans to go public immediately after the market stabilizes.

Drew Bernstein, co-founder and co-chairman of Marcum Asia CPAs LLP, stated in an exclusive interview with Yicai that a friendlier regulatory environment is expected to reignite the U.S. IPO market.

Bosting further explained that there are three types of companies in the market now. The first type is companies that have cash and revenue, and given that the IPO market value is not as expected, these companies are currently sitting on the fence; the second type is companies that, if they need financing, have no choice but to go for an IPO, and investors are willing to provide whatever they can; the third type is the few companies that have raised funds in the IPO market this year. He stated that these companies are willing to bear the listing costs for several years. Even though the current valuation is unfavorable to them, if the companies can successfully execute their business plans, and with market improvement, the valuation will increase.

“Market delays and uncertainties.” Burstein added, “I hope the new government can create a better market that is more competitive.”

(Article source: Yicai)

Source: East Money Information

Author: Yicai