FinTech broker Clear Street has taken a $4 billion haircut as markets wobble ahead of its U.S. IPO.
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The securities and derivatives broker has slashed the $11.8 billion valuation target it is seeking in the IPO by around a third to $7.2 billion.
Share Offering Slashed
It is now offering 13 million shares priced between $26 and $28 apiece. It had initially marketed 23.8 million shares priced between $40 and $44 each to raise up to $1.05 billion.
According to Bloomberg News, Clear Street had faced investor pushback on its initial valuation target as a result of recent market volatility.
Despite a broader revival in IPO activity this year, investors remain disciplined on valuations, seeking realistic pricing and showing caution toward richly priced listings.
The offering is expected to price later today and the stock will list on the Nasdaq under the symbol “CLRS”. Goldman Sachs (GS), BofA Securities (BAC), Morgan Stanley (MS), UBS Investment Bank (UBS) and Clear Street are the lead book-running managers.
Prime Brokerage Demand
Founded in 2018 as a prime brokerage platform, the New York-based company has broadened its business since then, entering areas such as investment banking and equity research.
Prime brokerage is where investment banks and other financial institutions like Clear Street offer services such as securities lending, trade execution, and cash management to clients. In its own words, Clear Street offers a ‘completely cloud-native clearing and custody system,’ which is replacing the legacy infrastructure used across capital markets.
It has 700 institutional clients and $16 billion in customer balances. It has had a stellar last 12 months with the company expecting net revenue between $1.04 billion and $1.06 billion in 2025, compared with $463.6 million a year ago.
According to Reuters, funds managed by BlackRock (BLK) have indicated interest in purchasing up to $200 million worth of Clear Street shares when it goes public.
Goldman Sachs GS +1.80% ▲ , BofA Securities BAC -1.02% ▼ , Morgan Stanley MS +0.55% ▲ , UBS Investment Bank UBS +0.97% ▲ and Clear Street are the lead book-running managers.
What Other IPOs are in the Pipeline?
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