Non-US Firms Lead Biggest IPOs on US Exchanges

In what appears to be a surprising trend, the biggest initial public offerings (IPOs) on US exchanges this year are coming from companies based outside the United States.

Key Points:

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1. Waystar Holding Corp.’s IPO: Waystar Holding Corp. recently launched its IPO, aiming to raise $1.04 billion. While it could be the largest IPO by a US company this year if priced at the top of its range, it doesn’t even make the top three when considering all IPOs on US exchanges in 2024.
2. Dominance of Non-US Firms: The largest IPOs on US exchanges this year are by non-US firms, including Viking Holdings Ltd. in Bermuda, Amer Sports Inc. in Finland, and Kaspi.KZ JSC in Kazakhstan. Non-US companies have accounted for 39% of the $17.2 billion raised in IPOs on US exchanges so far this year, the highest share in more than a decade.
3. Reasons for Listing in the US: Many global companies are choosing to list in the US instead of their home countries due to the higher valuations US stocks offer. The US market attracts issuers looking for specialized knowledge of their companies and a large number of sector-specific investors, resulting in a willingness to pay higher valuation multiples.
4. Valuation Gap: US stocks have the highest valuations globally, making them attractive to issuers. This valuation gap is particularly pronounced in sectors like energy and materials, possibly due to different regions’ approaches to environmental, social, and governance (ESG) factors.
5. Future Trends: Despite the dominance of non-US companies in recent IPOs, it is expected that the majority of international issuers will continue to come from Europe and Asia. Companies like Swedish fintech Klarna Bank AB and Mexican airline Grupo Aeromexico SAB are among those set to list in the US in the near future.

In summary, the trend of non-US companies leading the biggest IPOs on US exchanges this year highlights the attractiveness of the US market and its potential for international firms seeking higher valuations and specialized investor interest.