Klarna IPO, Mergers and Other Deals Don’t Augur a Banking Boom
Investment bankers should keep the champagne on ice for now.
Despite a flurry of US IPOs, investment bankers should keep the bubbly on ice for now.
Photograph: Getty Images
Buy-now-pay-later firm Klarna Group Plc is among a string of companies bringing US public stock offerings in what looks like an extremely busy September for investment bankers. There’s a window for doing deals that’s currently wide open after an unusually placid summer for financial markets, which has squashed volatility in bonds, currencies and equities. Bankers and executives will want to try to use this for listings, other fundraisings or mergers and acquisitions as swiftly as possible, just in case it slams shut.
With President Donald Trump bashing the Federal Reserve and trying to force rate-cutting yes-members onto its board, there’s an eerie complacency about his ability to spark another crash in investor sentiment at the drop of a Truth Social post. Also, conditions aren’t perfect anyway: Klarna’s initial public offering aims to value the business at least $1 billion below the $15 billion-plus target the lender had earlier in the year.