Office Hours: Tesla’s ESG Rating, the Closed IPO Market, and Advancing Your Career

Market Closure

The current closure of the IPO market is driven by several factors, including increased interest rates and a higher cost of capital, which have made investors wary of new companies. Scott Galloway explains that even strong companies struggle to go public in such an environment, as market dynamics often overshadow individual performance 1. He notes that the number of U.S. IPOs has drastically decreased, with 113 IPOs this year compared to 484 at the same time in 2021 2.

Market dynamics always trump individual performance. And as Americans, we like to think that any individual or any individual company can overcome all obstacles, including this pesky thing called the market.

--- Scott Galloway

This decline is further exacerbated by a shift away from SPACs, which once dominated the market but are now less appealing to investors.

   

Reopening Predictions

Forecasting the reopening of the IPO market remains uncertain, but Scott Galloway is confident it will eventually happen. He suggests that the market could take anywhere from one to three years to recover, as it typically takes time to "thaw" after such closures 1. Despite the current downturn, Galloway believes that the market can open as quickly as it closed, though predicting the exact timing is challenging.

The good news is the markets can open as quickly as they were shut. They usually take, I would say between one and three years to kind of go through this, to thaw, if you will.

--- Scott Galloway

This optimism is tempered by the reality that investors have moved away from growth and cash flow-negative companies, making the path to reopening complex.