Incoming Trump Administration Could Spark Waves of Tech IPOs and M&A Activity

With the outcome of the U.S. election becoming clear, it is expected to spur a surge in U.S. IPOs. Madhu Namburi, Chairman of Global Technology Investment Banking at J.P. Morgan, recently stated that there are currently hundreds of private tech companies waiting to go public, and it is anticipated that the Trump administration will accelerate the listing process for some tech companies.

In an interview, Madhu Namburi said, "When we look at our analysis, we have about 750 quality companies in tech alone that want to get out. Sixty to 70 companies go public in a normal year. That's a lot of backlog."

With the election results settled, the IPO market is showing positive signs, Namburi added, companies that prioritize growth over profitability will be favored.

In addition, large-scale M&A deal activity is also expected to be boosted. Currently, although deals between $5 billion and $10 billion have rebounded to pre-pandemic levels, the overall situation remains weak.

Namburi said that large deals in the technology sector have been hindered by regulatory reviews that last 12 to 18 months or longer, and he expects that this prolonged regulatory scrutiny will change under the incoming Trump administration.

He believes that "The process should become more streamlined — that's the expectation and the hope — which should get people more bold to start venturing back into these larger deals."

Last week, Jamie Dimon, CEO of J.P. Morgan, also expressed that bankers are cheering the incoming Trump administration after a few years of stricter regulatory environments, as Wall Street expects Trump to cut regulatory measures and revive the prospects of the banking industry in his second term.

The market currently expects Trump to implement more deregulation and business-friendly policies, which are expected to stimulate investment and other banking activities, such as M&A activities. Trump had taken similar measures in his first term, relaxing regulations on the banking industry.

Not only J.P. Morgan, Wells Fargo analyst Mike Mayo recently said in a research report that Trump's victory will change the regulatory rules of the game for the banking industry. He said that Trump's new administration could mean more liberalism, less stringent regulation, and reduced regulatory risk.