An unanticipated casualty of the government shutdown could be the schedule of tech IPO's expected this year.
The government shutdown is entering its third week and the potential for further delay is coming quickly into view after President Trump said on Friday that he would be willing to keep the shutdown effective "for years" if necessary.
The issue of timing is paramount at present due to the market's current volatility and investors' worry about the stage of the current market cycle. As such, it may be advantageous for companies like Uber, Lyft, Palantir, Slack, Airbnb, and more to front-load their IPOs to the first half of the year.
"God forbid if we go into recession, normally the lull after that can be pretty long .From the top to the bottom, to the peak to the trough, in some cases can last up to two years," Santosh Rao, Head of Research at Manhattan Venture Partners, explained. "I'm sure these companies don't want to get caught up in that side. They want to beat that lull that comes after a huge rally."
Unfortunately for executives seeking the opportune IPO timing, the early part of the year might be restricted after the SEC said in December that it would stop declaring effective registration statements, a necessary step in the IPO process, due to its reduced headcount amidst the shutdown.
On the bright side, Rao said that he expects the shutdown to conclude in the coming weeks.
"At this point it looks like at the margins, maybe [IPOs] slow down a little bit," he said. "You don't want it to stretch for a month, two months and then there's going to be backlog and slowdown and everything, but at this point, it looks like there'll be some resolution. We'll see, you never know these days."
For more on what to expect from the IPOs this year and how the current macroeconomic and political environment will affect each one, check out TheStreet's full interview with Rao here.