Wall Street’s dealmaking activity has come to a standstill, causing substantial losses for major banks. However, there’s hope that the tide could turn, and it might be thanks to a surprising figure—Kim Kardashian.
Goldman Sachs recently reported a 20% decline in investment banking revenue during the second quarter of 2023, leading to a 58% drop in overall profit compared to the previous year. CEO David Solomon attributed the slowdown to clients adopting a risk-averse approach in an uncertain economic climate, resulting in historically low levels of dealmaking worldwide.
Yet, experts believe that numerous healthy companies are eager to go public, but they are hesitant to be the first to do so. The anticipation is that once the first significant IPO takes place, more deals will follow.
One potential candidate to spark this wave of IPOs is Kim Kardashian’s clothing line, Skims. Recently, Skims raised an impressive $270 million in a fundraising round, valuing the company at around $4 billion. With support from Wellington Management, a firm experienced in taking companies public, and the hiring of a CFO with prior experience at Nike, it suggests Skims may be preparing for an IPO.
The success of a Skims IPO could be a turning point for the market. Companies, CFOs, and investors would view it as a positive signal, potentially leading to a surge of IPO activity akin to the boom seen in 2021.
However, some experts caution that while a Kardashian-backed company like Skims may gain widespread attention, other tech and science-focused firms without similar public recognition might not experience the same buzz. Until investors become more willing to take risks, the IPO market might not see a significant resurgence.