Investment Banks Eye IPO Market Rebound as Discord Taps GS, JPM for Listing
The planned offering for the popular chat platform could signal a turning point for the dormant tech IPO market, a critical revenue stream for Wall Street's top underwriters.
A significant sign of life is emerging in the dormant market for initial public offerings, with Wall Street investment banks poised to benefit from what could be a long-awaited rebound. Chat and social media platform Discord is preparing to file for an IPO, according to a report from Bloomberg, and has reportedly selected Goldman Sachs (NYSE: GS) and JPMorgan Chase & Co. (NYSE: JPM) to lead the offering.
The move is one of the most concrete signals yet that the IPO window, which has been mostly shut for two years due to market volatility and interest rate uncertainty, is beginning to reopen. For investment banks, a revival of the IPO market is critical. Underwriting fees are a high-margin business, and a return of large tech listings could provide a substantial boost to revenues that have been under pressure.
The broader market has been building a stronger foundation for public listings. After a challenging period, the IPO market demonstrated a significant rebound in the first half of 2024, with total proceeds raised increasing by over 80% compared to the same period in 2023, according to DFIN Solutions. While the market has not fully reopened, the successful listings of several large companies have improved sentiment. Looking ahead, the outlook for 2025 appears even more promising, with Deloitte forecasting a normalization of IPO activity, potentially bringing it in line with historical averages.
Goldman Sachs and JPMorgan, two titans of global finance, are prime beneficiaries of this trend. In recent trading, Goldman Sachs shares were changing hands around $955, reflecting a market capitalization of approximately $287 billion. JPMorgan Chase, the nation's largest bank by assets, traded near $334, giving it a market value of nearly $900 billion. The selection of these two firms to lead a high-profile technology IPO underscores their dominant position in the league tables for equity underwriting.
Discord’s potential public offering is particularly noteworthy due to its scale and brand recognition in the technology space. A successful debut could create a positive feedback loop, encouraging other venture-backed 'unicorns' that have remained private to finally test the public markets. This would unlock a significant pipeline of potential deals for the entire investment banking sector, which has been leaning more heavily on debt issuance and advisory work.
A sustained recovery in equity capital markets is crucial for the industry's health. Projections from professional services firm EY suggest a continued recovery for global banking, with investment banking revenues expected to grow by 13% in 2025. This optimism is fueled by anticipated interest rate cuts and a strong backlog of companies waiting for favorable conditions to go public. For Wall Street, the Discord IPO is more than just a single deal; it's a barometer for the health of the entire capital markets ecosystem.