This was supposed to be the year when so many of America’s tech darlings — Uber, Pinterest, Peloton — stuck the perfect landing and became public companies like Apple, Facebook, and Amazon.
Then politics got in the way.
The 2019 IPO pipeline now finds itself doubly squeezed by two factors beyond its control: Shaping the front half of the year is the halted government shutdown, which created a weeks-long backlog of needy startups seeking guidance from a shuttered SEC, which will now have to handle a big workload. And shaping the back half of the year is an economy that is showing flashes of a looming recession, meaning that startups are racing to go public sooner than once anticipated. So there’s the pinch.
This all carries a healthy dose of irony, since so many startups have been delaying their public offerings in search of that elusive exceptional timing. Not 2016. Not 2017. Not 2018. Yes, let’s plan on 2019. Did the perfect become the enemy of the good?
Bankers and other people advising prospective IPOs worry that the 35-day government shutdown, which came to a temporary end on Friday, could cast a cloud over the entire first half of the listing year. No one is entirely sure what paperwork the SEC, with its skeleton staff, is going to pick up now that the government is reopening. (And maybe it’ll close again in three weeks.)
The thinking was, though, that there’s some merit to at least being at the top of the stack. So some companies, such as PagerDuty, have submitted paperwork to the SEC, joining the queue with the hope that they’ll be among the first to receive comments on their files. Maybe.
The first few weeks of January are ordinarily a popular time to try and confidentially start the IPO process with the SEC. Some doomsayers are now worrying about the entire year being ruined by the January hiccup, with first-quarter listings becoming second-quarter listings, second-quarter listings becoming third-quarter listings, and suddenly, 2019 listings becoming 2020 listings.
“There are definitely guys who have pushed things back by quarter,” said one tech banker, who is advising several upcoming IPOs.
And that’s to say nothing of a recession.
No company wants to go public when the stock market shows a lot of red numbers. And while trying to predict a recession is as much of a fool’s errand as, well, trying to predict the end of a government shutdown, the thinking is to get the company onto the markets now before the IPO window closes for good.
So those planning IPOs describe new, accelerated timelines to try and beat the bear times. Uber, for instance, was initially planning an IPO in the second half of the year but is now targeting a first-half listing. Lyft has confidentially filed and is trying to beat Uber to the exits. And Pinterest, long an IPO flirt, is interviewing bankers to list in the middle of this year. Palantir, a company that was never expected to go public, is reportedly making rumblings.
2020 listings become 2019 listings. Third-quarter listings become second-quarter listings. Second-quarter listings become first-quarter listings. (You see the problem now.)
There’s a new race to go public, but the starting gates are locked. Until now.
This article originally appeared on Recode.net.