The shutdown has frozen the IPO machine mid-revival, forcing high-profile deals onto ice and threatening to turn Q1 into an overcrowded restart
Michael M. Santiago/Getty Images
Wall Street had its popcorn ready: After three years of sputters, the IPO screen was lighting up again, with Klarna, CoreWeave, and a handful of buzzy consumer names. Then Washington tripped over the power cord, plunging the whole IPO theater into darkness.
With a federal government shutdown having started this week, the Securities and Exchange Commission is running on a skeleton crew. That means no new registration statements get reviewed, no comment letters get cleared, and no “effective” notices get stamped. The EDGAR paperwork portal is technically open, but without staff to process deals, it’s like hitting “submit” into a black hole.
That leaves high-profile would-be stock issuers — electric-aircraft maker Beta Technologies, Jennifer Garner’s baby-food brand Once Upon a Farm, and insurer Ethos Technologies — stuck at the gate. Alliance Laundry Systems and the University of Phoenix, both already on roadshows, are hoping that their timing bet (that the shutdown would be short) pays off. But if history is any guide, the logjam fattens by the day.
Initial public offering calendars run on an unforgiving clock: Financial statements go stale if the balance sheet is more than 135 days old, meaning companies that miss their October or November windows have to update to third-quarter numbers. That means revised filings, fresh audit reviews, new comfort letters — all costly, all delaying the sprint until January at the earliest.
Vineet Jain, the CEO of cloud-based software company Egnyte, said that if the shutdown is “short-lived,” he doesn’t see much of an impact on IPOs. “But if it goes longer, like what happened in 2018... then there could be a potential impact.”
During the last government shutdown — the 35-day freeze from December 2018 to January 2019 during President Donald Trump's first term — the domestic IPO almost ground to a halt. With the SEC unable to review or clear prospectuses, there were no traditional IPOs priced for weeks. A few companies tried workarounds: blank-check SPACs managed to slip through, and New Fortress Energy pushed forward by stripping out its “delaying amendment” so its registration could automatically become effective.
But those were exceptions, and January 2019 went down as one of the weakest months for IPO activity in years.
Once the government reopened, the backlog unleashed a flurry of activity, and 2019 ultimately produced hefty IPO proceeds thanks to blockbuster debuts, even though the number of listings fell. The lesson for 2025 seems clear: Shutdowns don’t kill IPO markets, but they do freeze them in place, delaying liquidity for companies and bankers and creating a crowded calendar when the gates finally reopen. The longer the pause, the more likely momentum slips and outside factors — from tariffs to inflation — creep in to reshape how investors value those deals when they finally hit the tape.
Jain thinks a parallel threat is looming: tariffs, which are “going to come home to roost,” and inflation. If inflation shows up as expected, he said, “then we have to correlate that to the IPO market.” So even if the SEC reopens in weeks, a tougher inflation and rate backdrop could dull investor appetite and compress valuation multiples.
“If there’s a stall in the process, and the momentum comes to a screeching halt… to restart, that itself is problematic,” Jain said. “If you have to stop to tie your shoelaces mid-marathon, the next mile is hard. The same thing could apply to these companies.”
This shock to momentum is also a reminder that the comeback was always selective. The pipeline is dominated by “high flyers” — names with 40–50% growth profiles, which Jain says indicates the IPO market is not broadly open. “It’s a misnomer,” he said. “They’re open for the high flyers. … When the 20–25% growth range starts going out successfully, then the IPO gravy train has truly moved on. That’s not yet.”
Meanwhile, seasoned public companies employing automatic shelf registrations can continue to issue — their deals will still clear without staff intervention. But true IPOs cannot. As Jain noted, the structural skew “tilts issuance mix” toward incumbents and away from first-time issuers, depriving many unicorns of their moment in the sun.
IPOs are a stakes game. They’d already raised almost $52.94 billion through 263 deals as of late September — the strongest annual pace since 2021. Retail, energy, fintech, and AI names were pushing the envelope. But now, core names that were supposed to finish the fall run may burn out first.
And yet, Jain doesn’t dismiss the upside. He said that the amount of money sitting in money market funds “could be the savior… as the window starts opening up again” and the flywheel starts building “because money is coming in.” Deep pools of capital could flood the moment the SEC reopens.
For IPOs right now, the race is against both time and tide.
“If you’re trying to close a deal, close it,” Jain said. “If the window gets extended, you don’t know what other macro factors will come into play.”
The longer this blackout drags, the more a revival may demand not just reopening, but renewed momentum, fresh positioning — and a little luck.
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