Broker Clear Street postpones IPO as AI fears roil US stocks

New York broker Clear Street has postponed its initial public offering hours after slashing the size of the planned deal by two-thirds, blaming volatile market conditions for its last-minute retreat.

The company had aimed to list on Nasdaq on Friday following an IPO it had hoped would raise as much as $1.1bn, according to filings with US regulators on Wednesday. At the top end of its price range the deal would have valued Clear Street at about $12bn.

Those plans were massively scaled back on Thursday when Clear Street said it aimed to raise $364mn in a downsized offering that would have valued the company at $7.2bn.

The IPO was shelved later in the day. Goldman Sachs was leading the offering and did not respond to a request for comment.

The U-turn came as US stocks fell sharply on Thursday, extending a volatile run for equity markets fuelled by concerns that AI will disrupt industries from publishing and law to insurance and financial services.

Clear Street said: “While our IPO generated strong interest from investors, we made the decision to postpone due to market conditions. We intend to reconsider the IPO at a later time.”

Software stocks and private equity groups that have piled into the sector in recent years were hardest hit last week following the release by AI company Anthropic of new productivity tools for legal and financial workers.

Wealth management companies, insurance brokers and property services have been swept up in the sell-off over the past three trading sessions as jittery investors have seized on suggestions that generative AI might impact those sectors’ profits, too.

Clear Street said in filings with the Securities and Exchange Commission this week that it is well positioned “to benefit from ongoing advances across the AI industry”.

The company operates two registered broker-dealers in the US while describing itself as a financial infrastructure technology company offering clients the “tools and service once reserved for the largest institutions”. Half of its roughly 800 employees are engineers.

In an indication of the breadth of the services it offers, Clear Street last year established itself as one of the most prominent underwriters of crypto-related stock offerings, including for Michael Saylor’s Strategy.

It also acted as underwriter for Trump Media & Technology Group, the Trump family’s crypto-oriented media group. A person close to Clear Street said crypto deals accounted for about 10 per cent of the company’s roughly $1bn in revenues last year.