March 20, 2025
How to Play the IPO Drought
Dear Subscriber,
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| By Chris Graebe |
We entered 2025 with high hopes for a strong IPO market. But after a record-breaking 2021 with 1,035 IPOs — the bubble burst.
IPOs plummeted to 181 in 2022 and 154 in 2023. Last year saw a modest rebound up to 225, but 2025 hasn't yet delivered the bounce back investors had hoped for.
While this year's IPO numbers are on track to exceed last year's slightly, it's far from the resurgence the market needs.
This slowdown comes on the heels of tariff announcements from the Trump administration and general uncertainty about how Washington's decision-making will affect investors.
But politics isn’t the only thing muddying the waters — inflation concerns, persistent interest rates and some recent underwhelming IPO performances have left public market investors wary.
Take Venture Global, a liquefied natural gas company whose IPO was highly anticipated but ultimately fell short.
It opened at $24 per share but closed its first day at $20. Just three months later, it’s hovering around $10.89.
The Trump administration has been vocal about its support for expanding LNG exports and boosting domestic oil and gas production, which investors hoped would translate into a strong IPO performance for Venture. That didn’t happen.
Other major IPOs this year have also failed to dazzle investors …
SailPoint, the first big tech company to go public in 2025, opened just over a month ago at $23 and is now trading down just under $20.
While not a terrible performance, IPO-watchers were hoping that SailPoint would set the year off with a bang. But it turned out to be more of a yawn than a bomb.
These weak performances still loom large in the IPO market. And it feels like investors are hunkering down, waiting for the fog to clear.
Private Market Insulation
It's not just investors who have changed their outlook, startups have too.
Many highly valuable companies that could otherwise go public are opting to stay private. Instead of risking a weak IPO, they continue growing and raising funding in the private market while waiting for a more attractive public market.
While we all wait for the public market to surge, there's no need to stop investing. In times like these, the private market — investing in startups — becomes even more attractive.
The biggest winners in an IPO aren’t the day-one public investors. They’re the investors who bought equity long before during seed funding.
Investing in the private market today is a way to benefit from future IPOs when the public market perks back up.
During times of uncertainty, pivoting to insulated markets is a way to avoid inaction and keep returns coming.
Startups haven’t stopped growing or planning for exits, whether through IPOs or M&As. Even when IPOs slow, strong startups continue building toward the public market.
The Energy Sector: Heating Up or Meltdown?
Yesterday, we discussed the temporary poor performance of uranium stocks and today the Venture Global IPO …
You might think mining, oil and energy are all in decline. However, the energy sector at large remains very promising — in particular clean energy.
McKinsey & Company projects that the $1.5 trillion invested into energy in 2023 could more than double to $3.2 trillion by 2040.
Meanwhile, the International Energy Agency reports that today, global clean energy investment is almost twice that of investment in fossil fuels.
While wind and solar dominate the sector's growth, nuclear energy is also on the rise.
Nuclear is a low-carbon energy source that's considered to be a part of the "clean energy" sector. And despite some safety concerns, consumer and governmental support for nuclear energy continues to grow.
The International Atomic Energy Agency estimates that global nuclear energy capacity will grow to 2.5 times its current size by 2050.
But just what kind of effect will Trump's energy plan have on the nuclear energy industry?
Probably not very much.
We know that President Trump has recently declared a "national energy emergency," which has been a vote of confidence for businesses and investors in the energy sector.
But, despite the clear support for oil and gas, this year’s big gas IPO fell flat.
And while he is generally against climate-focused and renewable energy initiatives, those areas are continuing to grow.
What we do know is that nuclear energy certainly doesn't conflict with his vision. Trump's pick for Secretary of Energy, Chris Wright, has openly supported nuclear as an important part of domestic energy strategy.
Some investors are already banking on it …
This brings me to my next deal — one I’ll be unveiling in just a few hours.
This private energy company is uniquely positioned to capitalize on the clean energy boom, including nuclear while aligning with the Trump administration's energy priorities.
And despite being an early stage company, it’s already laying the groundwork for a future IPO. This means that investors who get involved now will be ahead of the curve when market sentiment shifts.
Unfortunately, this pre-IPO funding round may fill up immediately. So, I have to reserve it for my Deal Hunter Alliance members. If you act right now, however, you can join them.
Happy hunting,
Chris Graebe
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