{"id":24722,"date":"2024-03-24T04:50:07","date_gmt":"2024-03-24T04:50:07","guid":{"rendered":"http:\/\/107391674"},"modified":"2024-03-24T04:50:07","modified_gmt":"2024-03-24T04:50:07","slug":"big-week-for-tech-ipos-reddit-astera-boosts-morgan-stanley-after-extended-lull","status":"publish","type":"post","link":"https:\/\/wp.worldtechguide.net\/big-week-for-tech-ipos-reddit-astera-boosts-morgan-stanley-after-extended-lull\/","title":{"rendered":"Big week for tech IPOs Reddit, Astera boosts Morgan Stanley after extended lull"},"content":{"rendered":"<p><span class=\"HighlightShare-hidden\"><\/span><\/p>\n<div class=\"InlineImage-imageEmbed\" id=\"ArticleBody-InlineImage-107390948\" data-test=\"InlineImage\">\n<div class=\"InlineImage-wrapper\">\n<div>\n<p>The New York Stock Exchange welcomes Reddit, Inc. (NYSE: RDDT) to celebrate its initial public offering. To honor the occasion, Snoo, rings the Opening Bell\u00ae.<\/p>\n<p>NYSE<\/p>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"group\">\n<p>Wall Street&#8217;s tech IPO bankers may finally have a reason to break out the champagne after an extended drought was broken up this week with the market debuts of <span class=\"QuoteInBody-quoteNameContainer\" data-test=\"QuoteInBody\" id=\"RegularArticle-QuoteInBody-1\"><span class=\"waslinkname\">Reddit<\/span><span class=\"QuoteInBody-inlineButton\"><span class=\"AddToWatchlistButton-watchlistContainer\" id=\"-WatchlistDropdown\" data-analytics-id=\"-WatchlistDropdown\"><button class=\"AddToWatchlistButton-watchlistButton\" aria-label=\"Add To Watchlist\" data-testid=\"dropdown-btn\"><span class=\"AddToWatchlistButton-addWatchListFromTag\"><\/span><\/button><\/span><\/span><\/span> and <span class=\"QuoteInBody-quoteNameContainer\" data-test=\"QuoteInBody\" id=\"RegularArticle-QuoteInBody-2\"><span class=\"waslinkname\">Astera Labs<\/span><span class=\"QuoteInBody-inlineButton\"><span class=\"AddToWatchlistButton-watchlistContainer\" id=\"-WatchlistDropdown\" data-analytics-id=\"-WatchlistDropdown\"><button class=\"AddToWatchlistButton-watchlistButton\" aria-label=\"Add To Watchlist\" data-testid=\"dropdown-btn\"><span class=\"AddToWatchlistButton-addWatchListFromTag\"><\/span><\/button><\/span><\/span><\/span>.<\/p>\n<p>While occupying very different corners of the technology market, Reddit and Astera were the first notable venture-backed tech companies to go public in the U.S. since <span class=\"QuoteInBody-quoteNameContainer\" data-test=\"QuoteInBody\" id=\"RegularArticle-QuoteInBody-3\"><span class=\"waslinkname\">Instacart<\/span><span class=\"QuoteInBody-inlineButton\"><span class=\"AddToWatchlistButton-watchlistContainer\" id=\"-WatchlistDropdown\" data-analytics-id=\"-WatchlistDropdown\"><button class=\"AddToWatchlistButton-watchlistButton\" aria-label=\"Add To Watchlist\" data-testid=\"dropdown-btn\"><span class=\"AddToWatchlistButton-addWatchListFromTag\"><\/span><\/button><\/span><\/span><\/span> and <span class=\"QuoteInBody-quoteNameContainer\" data-test=\"QuoteInBody\" id=\"RegularArticle-QuoteInBody-4\"><span class=\"waslinkname\">Klaviyo<\/span><span class=\"QuoteInBody-inlineButton\"><span class=\"AddToWatchlistButton-watchlistContainer\" id=\"-WatchlistDropdown\" data-analytics-id=\"-WatchlistDropdown\"><button class=\"AddToWatchlistButton-watchlistButton\" aria-label=\"Add To Watchlist\" data-testid=\"dropdown-btn\"><span class=\"AddToWatchlistButton-addWatchListFromTag\"><\/span><\/button><\/span><\/span><\/span> in September. Before that, there hadn&#8217;t been a significant deal since late 2021.<\/p>\n<p><span class=\"QuoteInBody-quoteNameContainer\" data-test=\"QuoteInBody\" id=\"RegularArticle-QuoteInBody-5\"><span class=\"waslinkname\">Morgan Stanley<\/span><span class=\"QuoteInBody-inlineButton\"><span class=\"AddToWatchlistButton-watchlistContainer\" id=\"-WatchlistDropdown\" data-analytics-id=\"-WatchlistDropdown\"><button class=\"AddToWatchlistButton-watchlistButton\" aria-label=\"Add To Watchlist\" data-testid=\"dropdown-btn\"><span class=\"AddToWatchlistButton-addWatchListFromTag\"><\/span><\/button><\/span><\/span><\/span> was the big winner among banks, having captured the coveted lead left spot on both IPOs. <span class=\"QuoteInBody-quoteNameContainer\" data-test=\"QuoteInBody\" id=\"RegularArticle-QuoteInBody-6\"><span class=\"waslinkname\">Goldman Sachs<\/span><span class=\"QuoteInBody-inlineButton\"><span class=\"AddToWatchlistButton-watchlistContainer\" id=\"-WatchlistDropdown\" data-analytics-id=\"-WatchlistDropdown\"><button class=\"AddToWatchlistButton-watchlistButton\" aria-label=\"Add To Watchlist\" data-testid=\"dropdown-btn\"><span class=\"AddToWatchlistButton-addWatchListFromTag\"><\/span><\/button><\/span><\/span><\/span> led last year&#8217;s only two big venture-backed offerings, meaning it had been a long dry spell for Morgan Stanley. The bank was lead left on IPOs for <span class=\"QuoteInBody-quoteNameContainer\" data-test=\"QuoteInBody\" id=\"RegularArticle-QuoteInBody-7\"><span class=\"waslinkname\">HashiCorp<\/span><span class=\"QuoteInBody-inlineButton\"><span class=\"AddToWatchlistButton-watchlistContainer\" id=\"-WatchlistDropdown\" data-analytics-id=\"-WatchlistDropdown\"><button class=\"AddToWatchlistButton-watchlistButton\" aria-label=\"Add To Watchlist\" data-testid=\"dropdown-btn\"><span class=\"AddToWatchlistButton-addWatchListFromTag\"><\/span><\/button><\/span><\/span><\/span> and <span class=\"QuoteInBody-quoteNameContainer\" data-test=\"QuoteInBody\" id=\"RegularArticle-QuoteInBody-8\"><span class=\"waslinkname\">Samsara<\/span><span class=\"QuoteInBody-inlineButton\"><span class=\"AddToWatchlistButton-watchlistContainer\" id=\"-WatchlistDropdown\" data-analytics-id=\"-WatchlistDropdown\"><button class=\"AddToWatchlistButton-watchlistButton\" aria-label=\"Add To Watchlist\" data-testid=\"dropdown-btn\"><span class=\"AddToWatchlistButton-addWatchListFromTag\"><\/span><\/button><\/span><\/span><\/span> in December 2021.<\/p>\n<p>In the past two years, there have only been 15 tech IPOs total, according to <span class=\"waslinkname\">research<\/span> provided by University of Florida finance professor Jay Ritter. That came after a booming market in 2021, when 121 tech companies went public, the most since the dot-com bubble in 2000. Goldman Sachs and Morgan Stanley <span class=\"waslinkname\">cut thousands of jobs<\/span> last year in part due to the downturn in initial public offerings.<\/p>\n<p>&#8220;The capital markets have been relatively quiet the past couple of years,&#8221; said Eric Juergens, a partner at law firm Debevoise and Plimpton who focuses on capital markets and private equity. Investment banks have &#8220;certainly been active in pitching clients on IPOs and other transactions and positioning themselves to be there when companies are finally ready,&#8221; he said.<\/p>\n<p>Some market experts see the past week&#8217;s action as a sign of what&#8217;s to come. New York Stock Exchange President Lynn Martin told CNBC on Thursday, at the opening of Reddit trading, that a lot of companies are working toward going out in the second quarter.<\/p>\n<\/div>\n<div role=\"region\" aria-labelledby=\"Placeholder-ArticleBody-Video-107391022\">\n<div role=\"button\" id=\"Placeholder-ArticleBody-Video-107391022\" class=\"PlaceHolder-wrapper\" data-vilynx-id=\"7000335121\" data-test=\"VideoPlaceHolder\">\n<div class=\"InlineVideo-videoEmbed\" id=\"InlineVideo-0\" data-test=\"InlineVideo\">\n<div class=\"InlineVideo-wrapper\">\n<div class=\"InlineVideo-inlineThumbnailContainer\"><img decoding=\"async\" class=\"InlineVideo-videoThumbnail\" src=\"https:\/\/wp.worldtechguide.net\/wp-content\/uploads\/2024\/03\/big-week-for-tech-ipos-reddit-astera-boosts-morgan-stanley-after-extended-lull.jpg\" alt=\"NYSE President Lynn Martin: Reddit IPO was a 'big test' for other companies\"><span class=\"InlineVideo-videoButton\"><\/span><span><\/span><\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"group\">\n<p>That would be welcome news for Morgan Stanley. The bank collected around $37 million in total fees as the lead underwriter for the Astera and Reddit IPOs. It&#8217;s a drop in the bucket for the bank, which <span class=\"waslinkname\">reported $12.9 billion<\/span> in net revenue last quarter, largely from wealth management. But it could be a sign of life in the investment banking unit, which saw revenue drop by 46% over a two-year stretch from the fourth quarter of 2021 to the final three months of last year.<\/p>\n<p>The 12 underwriters on <span class=\"waslinkname\">Astera&#8217;s IPO<\/span> this week collected $39.2 million in fees, with Morgan Stanley taking one-third of the total, or around $12.9 million. The overallotment, or greenshoe option, which allows underwriters to purchase an additional 15% of shares for clients, would add $5.9 million to the fees paid out.<\/p>\n<p>Astera sells data center connectivity chips to cloud and artificial intelligence infrastructure companies. The stock soared 72% in its Nasdaq debut on Wednesday and continued rallying, gaining another 13% over the next two days, benefiting from investors&#8217; seemingly insatiable appetite for all things AI.<\/p>\n<\/div>\n<h2 class=\"ArticleBody-subtitle\">&#8216;Everyone was watching&#8217;<\/h2>\n<div class=\"group\">\n<p>Reddit&#8217;s <span class=\"waslinkname\">long-awaited IPO<\/span> came Wednesday night, with shares hitting the open market Thursday. Morgan Stanley made $13 million in fees in the deal and stood to make up to $5.6 million from fees on the greenshoe option.<\/p>\n<p>Shares of the 19-year-old social media company popped 48% in their first day of trading on the NYSE, before dropping 8.8% on Friday.<\/p>\n<p>Lise Buyer, founder of IPO consultancy Class V Group, said the market is showing signs of thawing.<\/p>\n<p>&#8220;A warm reception in the market for these IPOs surely will help open the floodgates,&#8221; Buyer said. &#8220;Everyone was watching these. Investors, boards of directors and management were encouraged by them.&#8221;<\/p>\n<p>She added that the bankers who have been waiting for action, &#8220;have to be delighted by this.&#8221;<\/p>\n<p><span class=\"QuoteInBody-quoteNameContainer\" data-test=\"QuoteInBody\" id=\"RegularArticle-QuoteInBody-14\"><span class=\"waslinkname\">Goldman Sachs<\/span><span class=\"QuoteInBody-inlineButton\"><span class=\"AddToWatchlistButton-watchlistContainer\" id=\"-WatchlistDropdown\" data-analytics-id=\"-WatchlistDropdown\"><button class=\"AddToWatchlistButton-watchlistButton\" aria-label=\"Add To Watchlist\" data-testid=\"dropdown-btn\"><span class=\"AddToWatchlistButton-addWatchListFromTag\"><\/span><\/button><\/span><\/span><\/span>, Morgan Stanley&#8217;s biggest rival, had the No. 2 position on the Reddit IPO, capturing about 19% of the fee payout. The firm scored wins last year as the lead on the Instacart and Klaviyo IPOs, which brought in combined fee revenue of around $35 million. When SoftBank took semiconductor design company Arm Holdings public last year, <span class=\"QuoteInBody-quoteNameContainer\" data-test=\"QuoteInBody\" id=\"RegularArticle-QuoteInBody-15\"><span class=\"waslinkname\">Barclays<\/span><span class=\"QuoteInBody-inlineButton\"><span class=\"AddToWatchlistButton-watchlistContainer\" id=\"-WatchlistDropdown\" data-analytics-id=\"-WatchlistDropdown\"><button class=\"AddToWatchlistButton-watchlistButton\" aria-label=\"Add To Watchlist\" data-testid=\"dropdown-btn\"><span class=\"AddToWatchlistButton-addWatchListFromTag\"><\/span><\/button><\/span><\/span><\/span> led the deal, with participation from Goldman Sachs, and <span class=\"QuoteInBody-quoteNameContainer\" data-test=\"QuoteInBody\" id=\"RegularArticle-QuoteInBody-16\"><span class=\"waslinkname\">JP Morgan<\/span><span class=\"QuoteInBody-inlineButton\"><span class=\"AddToWatchlistButton-watchlistContainer\" id=\"-WatchlistDropdown\" data-analytics-id=\"-WatchlistDropdown\"><button class=\"AddToWatchlistButton-watchlistButton\" aria-label=\"Add To Watchlist\" data-testid=\"dropdown-btn\"><span class=\"AddToWatchlistButton-addWatchListFromTag\"><\/span><\/button><\/span><\/span><\/span>.<\/p>\n<\/div>\n<div class=\"InlineImage-imageEmbed\" id=\"ArticleBody-InlineImage-107300872\" data-test=\"InlineImage\">\n<div class=\"InlineImage-wrapper\">\n<div>\n<p>Arm Holdings CEO Rene Haas poses for a photo with members of leadership outside of the Nasdaq MarketSite on September 14, 2023 in New York City.&nbsp;<\/p>\n<p>Michael M. Santiago | Getty Images<\/p>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"group\">\n<p>For Investment banks, the IPO is often viewed as just the beginning of the relationship with a company. The future could bring follow-on offerings, debt raises and acquisitions, which are all specialties of the top Wall Street firms.<\/p>\n<p>Morgan Stanley is finding another way to bring in additional potential business. In both the Reddit and Astera IPOs, a portion of the equity was set aside for so-called directed-share programs (DSPs), giving high-valued customers, business partners or company insiders a chance to participate.<\/p>\n<p>The model was previously employed by <span class=\"QuoteInBody-quoteNameContainer\" data-test=\"QuoteInBody\" id=\"RegularArticle-QuoteInBody-17\"><span class=\"waslinkname\">Airbnb<\/span><span class=\"QuoteInBody-inlineButton\"><span class=\"AddToWatchlistButton-watchlistContainer\" id=\"-WatchlistDropdown\" data-analytics-id=\"-WatchlistDropdown\"><button class=\"AddToWatchlistButton-watchlistButton\" aria-label=\"Add To Watchlist\" data-testid=\"dropdown-btn\"><span class=\"AddToWatchlistButton-addWatchListFromTag\"><\/span><\/button><\/span><\/span><\/span>, <span class=\"QuoteInBody-quoteNameContainer\" data-test=\"QuoteInBody\" id=\"RegularArticle-QuoteInBody-18\"><span class=\"waslinkname\">Rivian<\/span><span class=\"QuoteInBody-inlineButton\"><span class=\"AddToWatchlistButton-watchlistContainer\" id=\"-WatchlistDropdown\" data-analytics-id=\"-WatchlistDropdown\"><button class=\"AddToWatchlistButton-watchlistButton\" aria-label=\"Add To Watchlist\" data-testid=\"dropdown-btn\"><span class=\"AddToWatchlistButton-addWatchListFromTag\"><\/span><\/button><\/span><\/span><\/span> and <span class=\"QuoteInBody-quoteNameContainer\" data-test=\"QuoteInBody\" id=\"RegularArticle-QuoteInBody-19\"><span class=\"waslinkname\">Doximity<\/span><span class=\"QuoteInBody-inlineButton\"><span class=\"AddToWatchlistButton-watchlistContainer\" id=\"-WatchlistDropdown\" data-analytics-id=\"-WatchlistDropdown\"><button class=\"AddToWatchlistButton-watchlistButton\" aria-label=\"Add To Watchlist\" data-testid=\"dropdown-btn\"><span class=\"AddToWatchlistButton-addWatchListFromTag\"><\/span><\/button><\/span><\/span><\/span>, bringing power users or early customers into their IPOs. For Morgan Stanley, the DSPs have the potential to lure new individual customers into the bank for wealth management and other services.<\/p>\n<p>In Reddit&#8217;s case, the company said tens of thousands of Redditors participated in its DSP.<\/p>\n<p>&#8220;The goal is just to get them in the deal,&#8221; Reddit CEO Steve Huffman told CNBC in an interview on Thursday. &#8220;Just like any professional investor.&#8221;<\/p>\n<\/div>\n<div class=\"group\">\n<div class=\"RelatedContent-relatedContent\" id=\"RegularArticle-RelatedContent-1\">\n<div class=\"RelatedContent-container\">\n<div class=\"RelatedContent-nonCollapsibleContent\">\n<h2 class=\"RelatedContent-header\">Don\u2019t miss these stories from CNBC PRO:<\/h2>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<div role=\"region\" aria-labelledby=\"Placeholder-ArticleBody-Video-107391389\">\n<div role=\"button\" id=\"Placeholder-ArticleBody-Video-107391389\" class=\"PlaceHolder-wrapper\" data-vilynx-id=\"7000335222\" data-test=\"VideoPlaceHolder\">\n<div class=\"InlineVideo-videoEmbed\" id=\"InlineVideo-0\" data-test=\"InlineVideo\">\n<div class=\"InlineVideo-wrapper\">\n<div class=\"InlineVideo-inlineThumbnailContainer\"><img decoding=\"async\" class=\"InlineVideo-videoThumbnail\" src=\"https:\/\/wp.worldtechguide.net\/wp-content\/uploads\/2024\/03\/big-week-for-tech-ipos-reddit-astera-boosts-morgan-stanley-after-extended-lull-1.jpg\" alt=\"Reddit pops 48% in NYSE debut after selling shares at top of range\"><span class=\"InlineVideo-videoButton\"><\/span><span><\/span><\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>The New York Stock Exchange welcomes Reddit, Inc. (NYSE: RDDT) to celebrate its initial public offering. To honor the occasion, Snoo, rings the Opening Bell\u00ae. NYSE Wall Street&#8217;s tech IPO bankers may finally have a reason to break out the champagne after an extended drought was broken up this week with the market debuts of &hellip;<\/p>\n","protected":false},"author":1,"featured_media":24723,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8],"tags":[],"hashtags":[],"_links":{"self":[{"href":"https:\/\/wp.worldtechguide.net\/wp-json\/wp\/v2\/posts\/24722"}],"collection":[{"href":"https:\/\/wp.worldtechguide.net\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/wp.worldtechguide.net\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/wp.worldtechguide.net\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/wp.worldtechguide.net\/wp-json\/wp\/v2\/comments?post=24722"}],"version-history":[{"count":0,"href":"https:\/\/wp.worldtechguide.net\/wp-json\/wp\/v2\/posts\/24722\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/wp.worldtechguide.net\/wp-json\/wp\/v2\/media\/24723"}],"wp:attachment":[{"href":"https:\/\/wp.worldtechguide.net\/wp-json\/wp\/v2\/media?parent=24722"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/wp.worldtechguide.net\/wp-json\/wp\/v2\/categories?post=24722"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/wp.worldtechguide.net\/wp-json\/wp\/v2\/tags?post=24722"},{"taxonomy":"hashtags","embeddable":true,"href":"https:\/\/wp.worldtechguide.net\/wp-json\/wp\/v2\/hashtags?post=24722"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}