Episode summary
Jersey Mike’s, Cumberland Farms Join Swelling IPO Pipeline in US | Bloomberg Businessweek
Bloomberg Businessweek Daily
· · 7 min · Hosts: Tim Stenovec, Carol Massar, Norah Mulinda · Guests: Anthony Hughes
Summary
US IPO activity is broadening beyond AI-linked listings, but the strongest market reception is still going to companies tied to that theme. Anthony Hughes said the average return on US IPOs this year is about 19%, roughly double the S&P 500, yet the market is still far from 2021 levels and many sectors remain absent.
Consumer-facing companies are starting to test the market, with Jersey Mike’s and Cumberland Farms filing as examples of non-tech names trying to break through. Hughes said consumer stocks have generally underperformed and that inflation is pressuring demand, but Jersey Mike’s stands out because of its consistent same-store sales growth, store expansion, and relatively modest leverage.
Blackstone-backed Jersey Mike’s is particularly notable because it was acquired for about $8 billion last year and is now targeting a roughly $12 billion valuation, which Hughes said highlights its exceptional performance. He also pointed to the possibility that if the AI trade cools, bankers will want other steady businesses ready to fill the void, including insurance brokers and other companies that are not obviously AI plays.
Key takeaways
- Anthony Hughes said the average return on US IPOs this year is about 19%, roughly double the S&P 500, even though issuance is still below 2021 levels.
- He said the best-performing IPOs have largely been AI-adjacent or private-equity backed, including companies like Forgent and Madison Air.
- Jersey Mike’s is attracting attention because of consistent 2% to 3% same-store sales growth, high single-digit store growth, and lower leverage after the IPO.
- Hughes said consumer IPOs have been weak overall, with inflation and lackluster equity performance making the category less attractive than AI-linked listings.
- He argued that if the AI trade comes off the boil, non-tech listings like Jersey Mike’s and insurance broker Hub International could help fill the pipeline.
Notable quotes
“the average return from this year's IPOs is about um 19% uh for the US IPOs”
“it's really been uh companies that are sort of AI adjacent, some of them private equity backed”
“Consumers been tough. So, I mean if you look at the consumer stocks, they're they're actually underperformed the overall market here materially this year”
“they got very good, uh, same store sales growth and, uh, growth in store growth, which means they got very consistent, uh, double-digit growth overall”
“if we do see the AI trade come off the boil here”
How the episode opens
Bloomberg Audio Studios. Podcasts, radio, news. — You're listening to Bloomberg Business Week with Carol Massar and Tim Stenovec on Bloomberg Radio. We've got Anthony Hughes with us, a Bloomberg News US equity capital markets reporter. He joins us here in the Bloomberg Interactive Brokers studio. I want to talk about what Nora says are some delicious submarine sandwiches.
Oh, yeah. — Yeah, you like these Jersey Mike's? — Is where it's at. — Um and we'll talk about Cumberland Farms, but the moment right now for for IPOs, it it it something is happening here.
Uh yes, well SpaceX obviously was the deal that got all the attention and uh it's traded reasonably well. I mean, I know there's been a lot of stories saying how it's pulled back and that's been uh a negative, but it's still considered a pretty successful transaction. Um I was just looking at the stats and uh if you look at the uh number of IPOs this year and we break it up where we'll take away the SPACs and we'll look at just the big deals, the $50 million plus deals, we can go $100 million plus deals, but you know, the average return from this year's IPOs is about um 19% uh for the US IPOs.
Mhm.
And that's about double what the market's doing if you look at the S&P 500. So, you know, that's a that's a good year for the banks, but you know, it's it's it's a lot of IPOs, but it's not it's not we're not at 2021 proportions by any stretch. We don't have these we have a lot of sectors that are not participating and if you look at the the IPOs that have done well, I was just looking at this earlier, it's really been uh companies that are sort of AI adjacent, some of them private equity backed.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- ipo pipeline
- us listings
- market broadening
- ecm news
- ai economy
Companies and tickers mentioned
- BX
- Jersey Mike’s Subs
- Cumberland Farms
- Blackstone
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Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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