The world's biggest start-ups will probably push ahead with initial public offerings next year despite markets that have been in free-fall lately, according to J.P. Morgan's global chairman of investment banking Jennifer Nason.
In fact, the sharp decline in stocks this month has investment bankers feverishly working to help companies file earlier in 2019 on the risk that markets get even less accommodating later in the year, Nason said.
"Anyone thinking they had plans to go public in 2019 is accelerating those plans," she said in an interview. "The first half of 2019 could be a lot better than the second half of 2019 or 2020. Market risk is a funny thing; it's not just happening now and then it disappears next year."
Next year could be a record one for IPOs if start-ups including ridesharing firms Uber and Lyft go public. Uber, reportedly valued at $120 billion, represents a class of industry-disrupting companies that is finally ready to list publicly traded shares after spending years tapping private sources of cash, becoming established brands in the process.
Of the firms that also include Airbnb, WeWork, Slack and Palantir, Nason said she expects "most or all of those companies will be public" next year. Pinterest, Robinhood and Instacart could also choose to list in 2019.
It's a critical time to be testing demand on public markets. After reaching record highs in September, stock indexes declined on worries over the U.S.-China trade dispute and rising interest rates. Then stocks plunged further this month, putting December on track to be the worst for equities since the Great Depression.
The jolt in markets is a reminder that companies face a narrowing window to go public before a nearly decade-long economic expansion ends. When that happens, corporations will have a harder time persuading investors to pay for the valuations that bankers have painstakingly settled on. Already, the decline in tech shares since September has several newly public firms trading below their debut prices.
But solid companies that are upending the established order will probably do well in most market scenarios, said Nason, a three-decade J.P. Morgan veteran who spent most of her career in technology, media and telecommunications banking. Visa, for instance, went public in March 2008 and managed to beat market indices for years.
"I don't like all this volatility, it scares people, but I think it's being overplayed, there are bigger forces as work," Nason said. "This is a freight train of innovation; there's no Dow or Nasdaq up or down a few hundred points that's going to change that. There's so much capital out there looking for opportunities to invest in these paradigm shifts."