- Medline’s $6.3B IPO, the biggest U.S. listing since 2021, jumped over 40% on day one, signaling revived IPO demand.
- Huge first-day pops in 2025 deals like Figma and Circle suggest widespread underpricing that leaves issuers billions on the table.
- A 2026 wave of large candidates (e.g., SpaceX, Anthropic) could strain investor capacity and crowd out smaller offerings.
- Many IPOs that surge at debut later fall below their first-day close, raising questions about valuations and durability.
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The U.S. IPO market appears to be entering a resurgence, marked by blockbuster issues and strong early performance, but this revival carries both opportunity and risk.
Strong momentum from Medline sets the tone. Medline’s IPO raised approximately $6.3 billion—the largest U.S. IPO since Rivian in 2021—and ended its first trading day more than 40% above its $29 pricing level. This dramatic debut is being viewed by bankers as a bellwether for 2026 and is expected to represent over 10% of the total U.S. IPO volume for 2025.
High first-day pops reflect pent-up demand—and potential underpricing. Deals like Figma and Circle have shattered expectations: Figma jumped ~250% on its first day after pricing at $33, and Circle rose about 168%. These outsized returns suggest that issuers may be leaving substantial money on the table, with analysts estimating that more conservative pricing strategies could have yielded some $6 billion more for issuers from the 20 largest IPOs in 2025.
Market projection and possible saturation heading into 2026. Numerous high-profile private companies (SpaceX, Anthropic, etc.) are preparing for IPOs, and banks are aggressively positioning to lead advisory roles. However, there is concern that too many large offerings may overwhelm investors, forcing smaller issuers to offer discounts or settle for lower investor enthusiasm.
Aftermarket performance raises red flags for sustainability. Many IPOs that surged in their early trading days have since relinquished much of those gains; for instance, none of the top 10 IPOs by first-day gain are trading above their first-day closing prices. With early exuberance powered by hype rather than stable fundamentals, the risk of sharp corrections looms for investors who chase IPOs without scrutinizing long-term viability.
Strategic implications for stakeholders:
- Issuers might push for pricing more aggressively to capture pre-IPO investor demand and avoid underpricing losses. Underwriters will need to balance risk with maximizing capital raised. [.2]
- Institutional investors may need to weigh short-term vs long-term returns more carefully, given the discrepancy between opening day strength and longer-term performance.
- Regulators and market policy could come under scrutiny regarding registration delays (e.g. due to SEC slowdowns) and whether transparency over valuation guidance can be improved.
- ETF issuers and portfolio managers should consider structural shifts in allocation, possibly rotating exposure away from small IPOs toward larger, better-known names until volatility moderates. [.2]
Open questions:
- To what extent will 2026’s expected IPO wave stress capital market infrastructure and regulatory capacity (e.g. SEC registration, oversight)?
- Will investor demand sustain the current premium on IPOs as rising interest rates, macro risk, or regulatory pressures evolve?
- How many companies will price conservatively to avoid FOMO-driven overvaluation, and how many will still leave value on the table?
- What provisions will work best to protect retail vs institutional participants in IPO allocations as deal sizes grow?
Supporting Notes
- Medline Industries raised about $6.3 billion in its IPO, the largest U.S. initial public offering since Rivian (2021), and its shares closed over 40% above its $29 IPO price. Jim Boyle, CEO, noted the effort to “educate the investment community.”
- Figma IPO: priced at $33, first-day close of ~$115.50, representing a ~250% gain; raised about $1.2 billion total.
- Circle Internet Group IPO: priced at $31, first-day close ~168% above that; has since seen moderated performance but remains significantly above IPO price.
- On average, U.S. IPOs for 2025 are up ~11% from their IPO prices through the referenced date; the previous five years classes were down on average.
- 20 largest U.S. IPOs in 2025 averaged ~36% first-day gains—well above typical expectations of ~15-20% sweet-spot.
- Top IPOs by first-day gain generally have failed to stay above their first-day closing price—none of the 10 IPOs with largest first-day pops are currently priced above those closing points.