00:00The IPO year overall, give us some numbers, how we're ending up and how it compares to years
00:06past, because I think the peaks are back in what, 2020, 2021, back in the pandemic days.
00:11Yeah, well, thanks for having me. And I would say 2025 was the first true reopening of the IPO
00:16window in several years, but it was a selective one. Year to date, we've seen about 75 IPOs,
00:22including the one you were just talking about. That sounds good compared to the 62, 35, and 28
00:28IPOs that we've seen in 24, 23, and 22, respectively. But a good IPO year in the U.S. is anywhere
00:35between 100 and 150 IPOs. So we're well behind that. But overall, 2025, we've been largely in line
00:42with expectations. And in some areas, it's exceeded them. We've seen activity spread across sectors
00:47rather than concentrated in just one area. That kind of dispersion is a strong sign and speaks to
00:53improving investor confidence. I would say the performance has been differentiated. Higher
00:58quality companies like the one you're just talking about with strong fundamentals, solid revenue
01:02growth, profitable or a path to profitability, reasonable leverage, and a compelling long-term
01:09story have generally performed well in this market. On the flip side, IPOs with higher debt
01:15loads, more aggressive pricing, they've struggled in this market, especially in a volatile macro
01:20environment. So that outcome has not been surprising, but it reinforced how selective
01:24investors are right now. Okay, Mike, everyone just wants to talk about when, with regard to 2026,
01:31SpaceX, and what that IPO could look like if the company decides to go public next year. Does that
01:38make or break 2026? Well, look, I think when you look at the IPO pipeline for 2026, we see over 200
01:46potential issuers in line that could go public in 2026. The SEC shutdown that took place in October,
01:53November pushed a lot of companies that may have had the opportunity to issue in 25 into 26. So,
01:59number one, I think there's a deep pipeline of quality companies that are looking to go in addition to
02:04some of the big names. For example? I think we read them all in the headlines, some of the, you know,
02:11hyperscalers that are out there supporting the strong markets. In addition to those, there's a
02:16lot of PE-backed companies that, you know, the one today, they got a lot of attention, they priced
02:21well, they're trading well, as you noted. And I think the backlog of PE-backed companies, sponsor-backed
02:27companies in the market is as stronger than ever. They have been a quieter part of the IPO cohort for the
02:33last couple of years. So, I think 2026 is ripe for strong sponsor-backed companies that have been
02:39creating value in the background through M&A, through scaling, et cetera. So, I think we'll have
02:44a very active IPO market in 2026. Mike, if we look at performance of IPOs in 2025, it was really mixed.
02:52And overall, people think that AI names or crypto names have the biggest kind of, the best case for
03:00success. For 2026, what kinds of sectors you think would benefit, where you see the biggest potential,
03:08if we set aside some fundamentals or leverage? Like, where do you think investors should focus on?
03:15I think it's going to be a pretty wide sector representation in 2026. You mentioned AI. I think
03:21that entire ecosystem, despite the last few weeks or months where there's been some pressure against it,
03:27there's a deep pipeline of strong companies in that area from a data center, from a fiber perspective,
03:32and then just broader, the energy ecosystem that's required to power the data centers. And we need to
03:38catch up in that area. I think that's going to be very active as we look to 2026. Insurance,
03:44insurance was an active asset in 2025. Dependable cash flows, which investors like in a volatile market,
03:51will continue to see strong performing cash generating companies like an insurance company
03:57go well. And then I think other areas, you mentioned crypto, fintech, with the rise of digital
04:03assets and some healthy regulation in the tailwinds in that sector, we expect that to continue to move
04:09forward a lot. So again, I think it's be a broad sector representation, which to me represents a really
04:15strong IPO market. All right. So strong IPO market maybe to come in 2026. I looked at the IPO index,
04:21and I think it was up five, six, seven percent. I mean, it's definitely underperforming the broader
04:27market. I mean, we had dismal debuts of StubHub, Navin, Gemini, Space Station. And so they have all
04:33contributed to IPOs underperforming as an asset class, certainly compared to something like the S&P 500.
04:40You know, it kind of sits with the notion that companies that go public are supposed to have cheaper
04:44valuations than their listed peers. Getting pricing, Mike, will be key in 2026?
04:53I'm with you. When you look at the cohort of 2025, about 50 percent of the IPOs priced at the top end
04:59or above the range those initially set. So some pretty aggressive pricing there. I think many of the
05:04companies that have struggled in 2025 are companies with, you know, debt that's, you know, above four
05:10times EBITDA leverage, which is tough in a dynamic environment when there is uncertainty still in the
05:17marketplace. So I do think companies that are going out in 26 have to be conservative on valuations.
05:22They have to look at their debt loads going in. And some of those key metrics that I mentioned earlier
05:27around revenue growth, customer growth, some of those key metrics that really show a powerful return
05:34will be important. When you look at, again, the cohort of 2025, 65 percent of the companies that
05:40went out had positive cash flows. That's a stark difference than when you back up over the last five
05:45years. So the quality is definitely being raised. Hey, Mike, 10 seconds. SpaceX going to happen in the
05:50first half of the year. Do we even know? Have we heard anything? Do you hear anything real quickly?
05:54I see the same things you see in the headlines. I think 26 will continue to be an exciting year
06:00and hopefully we'll see some really big names go.
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