The market for initial public offerings (IPOs) has been red-hot in recent months, bouncing back after a spring freeze sparked by uncertainty over President Donald Trump’s tariff policies.
In the third quarter, there were 64 IPOs that raised a combined $15.3 billion. According to Renaissance Capital, this marked the biggest quarter for new offerings since 2021.
“IPOs delayed by earlier macro headwinds were revived or even accelerated to take advantage of surging demand for new issues, resulting in a steady pickup through July, a more-active-than-usual August, and more robust deal flow in September,” wrote Renaissance Capital in its Q3 review (PDF).
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Some of the more notable offerings we’ve seen this year include Peter Thiel-backed crypto company Bullish (BLSH) and design software firm Figma (FIG), which both raised more than $1 billion in their offerings. (Each stock has since fizzled since their impressive market debuts, though.)
And October started off strong too. Fermi (FRMI), a Texas-based company with big plans to build data centers, raised $683 million in its September 30 upsized offering, and shares surged 55% in their October 1 market debut.
But momentum could come to a grinding halt if the government shutdown, which began at 12:01 am Eastern Standard Time on Wednesday, October 1, does not come to a quick resolution.
Why would the government shutdown impact the IPO market?
Companies seeking to go public must file paperwork with the Securities and Exchange Commission (SEC).
“The S-1 includes the prospectus, with key details of how the company will operate, such as the business plan, risk factors, audited financials, management team bios, compensation and so on,” writes Kiplinger contributor Tom Taulli in his explainer, “What Is an Initial Public Offering (IPO)?”
The SEC then reviews the S-1 and “may request that certain changes be made. These changes will become part of an amended S-1, which will also be published on EDGAR. There will often be several of these filings.”
But the SEC is only running essential functions during the government shutdown, and with a low staff to boot. While EDGAR will remain operational, allowing companies to make filings as they normally would, “staff reviewing the filings will be furloughed, and any function that requires review from a member of the staff will not occur,” said the SEC in its government shutdown guidance.
The agency added that those firms “with pending comments from the SEC staff on their filings may respond to those comments, but SEC staff will not reply until normal operations resume.”
While a lengthy shutdown certainly creates a speedbump for an IPO market that has been barreling full steam ahead in recent months, it’s likely to be a temporary one.
“With a solid quarter of activity behind us and more deals lining up in the pipeline, the long-awaited IPO pickup appears to be well underway, and solid returns, stable market conditions, and a robust private backlog bolster a strong outlook for the rest of the year, provided that the government shutdown is resolved quickly,” says Renaissance Capital.