We were ready to write the epitaph for the U.S. IPO market, at least for this year. Then Newsmax, the right-wing media outlet, gave it a shot in the arm and got us all excited—only for us to realize, four days after its Nasdaq debut, that it was just the most recent “meme stock.” Newsmax debuted at $10 per share on April 1, reached an all-time high of $283 per share by midday, then lost 83% of its valuation from its peak, trading now at $26 per share. The question now is: Is the U.S. market for new listings dead?

An initial public offering, or IPO, is when a company first sells ownership shares to the public. Usually, a privately held company would IPO within ten years of existence, but something has changed over the past few years. Companies are taking longer to go public because they have access to abundant private funding, and tender offers give early investors a backdoor to cash in and buy their yellow Lamborghini.

Stabilizing interest rates and a business-friendly administration were supposed to make 2025 the year of a significant IPO resurgence, allowing the backlog of companies waiting for better market conditions to go public.

According to Renaissance Capital, in the first quarter of 2025, 53 IPOs raised a combined $8.5 billion, and seventeen IPOs raised $50 million or more, led by energy firm Venture Global ($1.8 billion) and AI-focused cloud computing firm CoreWeave ($1.5 billion).

However, the two most anticipated IPOs this year flopped. CoreWeave, an AI cloud-computing startup that rents out access to Nvidia chips, could not capitalize on the dizzying growth of AI. SailPoint, a computer software solution for identity management, failed to capitalize on Google’s biggest purchase ever, a $32 billion acquisition of cloud security company Wiz.

Both companies are currently trading below their IPO prices. The IPO market would likely not have been generous to Wiz had it chosen to go public instead of selling itself to Google.

Neither CoreWeave nor SailPoint were unicorns with little to no revenue before going public. They were startups with healthy balance sheets, strong revenue growth, and solid gross margins. Unicorns are startups that have achieved $1 billion in market value, and gross margin is a company’s profit after covering its costs to produce goods or services.

For example, consider an entrepreneur running a barbershop. If their direct costs (clippers, scissors, rent, and utilities) are $15 and they charge $25, their gross profit and margin are $10, or 40%.

Reviewing both companies’ Form S-1 filings showed healthy revenue growth and operating margins. For instance, CoreWeave, Inc. had $1.9 billion in revenue in 2024, a 17% operating income margin, and a staggering 737% revenue growth from the previous year.

As for SailPoint, Inc., it had $813 million in annual recurring revenue (ARR), 30% year-over-year ARR growth, nearly 3,000 customers, and 67% customer growth year-over-year.

CoreWeave did list potential risks, such as declining revenue growth due to its rapid expansion (from $16 million in 2022 to $1.9 billion in 2024) and business maturation. SailPoint noted its future revenues and operating results could suffer if it failed to acquire new customers or retain existing ones. Despite these points, both companies’ Form S-1s showcased startups with excellent business models and competitive industry advantages. Why the IPO market has been brutal to them remains unclear. This uncertainty is causing companies overdue to go public to stay private longer.

A Hint of Light That Wasn’t: Newsmax IPO

When the right-wing media outlet debuted at $10 per share and quickly rose to $283, the company reached a market capitalization of $20 billion. Investors, mature companies waiting for IPO conditions to improve, and investment bankers eager for deals rejoiced.

However, their rejoicing was short-lived as they quickly realized Newsmax’s brief IPO success wasn’t a market recovery sign but rather a classic pump-and-dump scheme. The company’s Form S-1 supported this newfound insight as well.

Making “Reading Form S-1 Great Again”

The phrase “Making Reading Form S-1 Great Again” somewhat contradicts the article’s point, considering CoreWeave’s and SailPoint’s Form S-1s reveal startups with solid business models and industry competitive advantages. However, not reading a startup’s Form S-1 before investing is malpractice and costly—just ask those who paid $283 per share for Newsmax.

Newsmax is a niche conservative media company. It enlisted existing shareholders such as Rudy Giuliani, popular among conservative and MAGA audiences, to frame its IPO as more than just a private company going public. Buying the stock was portrayed as fighting against “fake media” suppressing conservative ideologies, making business fundamentals secondary or irrelevant. Newsmax rode this message to a $20 billion valuation, briefly surpassing legacy media companies like Warner Bros. and Fox.

Newsmax’s S-1 reads like a patriotic pamphlet with media-bashing sprinkled throughout. If investors had looked beyond Nielsen ratings and MAGA buzzwords, they’d realize it wasn’t a growth story—it was a controlled asset sale dressed up as a public offering.

The company was not raising capital for expansion. Instead, existing shareholders—many politically connected early insiders—were cashing out.

Newsmax is a controlled company in every sense. Christopher Ruddy, CEO and face of the brand, holds 81.5% voting power through a dual-class share structure. Retail investors buying Class B stock have no voting control or governance say—they’re simply along for the ride, cheering from the sidelines while Ruddy controls the game.

The company elected “emerging growth company” status—SEC-speak for “we’re skipping accountability for now.” They reduced financial disclosures, skipped internal control attestations, and avoided detailed executive compensation discussions.

The short-lived, best-performing IPO this year was essentially a sophisticated pump-and-dump scheme. Where does that leave real and formidable companies like Klarna, StubHub, and Chime Financial, expected to go public later this year? Do they accept that the U.S. IPO market might remain closed in 2025 and wait until 2026?

Can All Startups Be Like SpaceX?

SpaceX is among many companies consciously deciding to stay private longer due to lackluster IPO performances and strict financial reporting requirements.

Tender offers, allowing early investors and employees to sell shares to investment firms and wealthy individuals, make it easier for startup founders to delay going public. Some private companies now raise capital solely to buy back employee shares.

However, not all startups have big investment firms and wealthy individuals lined up indefinitely. If the IPO market is indeed dead for this year, it will inevitably need to resurrect next year because there are simply too many unicorns. Nasdaq Private Market (NPM), a leader in tender offers, boasts over 250 unicorn clients—private companies valued at $1 billion or more—highlighting the preference many mature private companies have for private market access over going public.

The U.S. market for new listings has been abysmal since 2021. With numerous mature private companies awaiting entry, the market must reopen sooner or later.

As of this writing, there are 1,565 unicorn companies. Big investment firms and wealthy individuals will eventually want to cash out their investments—and drive yellow Lamborghinis too. Therefore, the reopening of the U.S. IPO market is inevitable. When it does, investors are strongly encouraged to include reviewing Forms S-1 as a key part of their due diligence process