Clear Street slashes IPO in drastic valuation reset
Clear Street dramatically slashed both the size and price of its Nasdaq IPO amid investor pushback on valuation, making it the latest company to weather scrutiny in a discerning new issue market.
The Wall Street broker is now selling 13m shares at US$26–$28, it outlined in a securities filing ahead of the US market open Thursday. That compares to the original 23.8m shares marketed at US$40–$44.
To accommodate investor orders, a syndicate of banks led by Goldman Sachs is keeping the books open until 1:00pm Thursday, ahead of pricing after the market close and a Friday debut. They had planned to close the books at 4:00pm Wednesday.
The banks communicated that there is interest from long-only investors at the revised terms, but that those investors were unwilling to participate at the valuation originally marketed.
BlackRock had agreed to invest up to US$200m upfront and is still on board as an anchor investor.
The revision in terms is extreme and suggests other long-only investors were behind the valuation reset.
Clear Street is now raising up to US$364m on the IPO (and BlackRock is taking more than half), versus the US$1.05bn it had sought at the high end of the original price talk. The company saw its equity market capitalization trimmed to US$8.2bn, below both the up to US$13.9bn valuation targeted at launch and the US$12bn valuation from a January 2026 late-stage funding round.
The market mood around new listings took a sharp turn amid a brutal selloff in software and adtech stocks triggered by AI-related fears.
Brazilian fintech AGI was also forced to substantially reduce the size and valuation of its NYSE IPO ahead of pricing Tuesday – its stock fell on debut Wednesday. Liftoff Mobile, an advertising technology firm backed by Blackstone, opted to pull its planned Nasdaq IPO last week, citing market conditions.