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Software selloff is disrupting some M&A and IPO deals, US bankers say
Rapid price swings in software stocks have led to a cautious market, with the sector down about 25% since October, stalling deal-making and IPOs, experts say.
- About a dozen financial advisers and deal-makers told Reuters that a broad sell-off in software stocks is stalling mergers and IPOs, with Liftoff Mobile postponing its listing and Visma potentially delaying a US$20-billion London float.
- Valuation benchmarks are shifting too quickly, confusing buyers and sellers as rapid moves in revenue multiples make price anchoring hard and anxiety about artificial intelligence amplifies uncertainty.
- Sector metrics show deep declines, with several public software companies trading at about one times their forward revenue, down about 25 per cent from Oct. 28, while the sector's worst three-month performance since 2002 persists.
- Over the next few weeks, deal-makers predict many transactions will break or be renegotiated, and Morgan Stanley warned on Monday the turmoil could spill into private credit markets where software makes up about 16 per cent of the US$1.5-trillion U.S. loan market.
- Industry leaders offer mixed takes on AI and market moves as Jon Gray ran AI risk assessments, Robert Smith said AI will 'enhance software, not replace it', and Goldman Sachs CEO David Solomon urged calm on Tuesday while private equity partners hunt deals.
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ZawyaSoftware selloff is disrupting some M&A and IPO deals, US bankers say
NEW YORK, Feb 11 - A broad selloff in software stocks is starting to stall deal-making and IPOs in the sector as volatility makes valuations unreliable and potential buyers cautious, about a dozen financial advisers and dealmakers told Reuters.The months‑long rout deepened last week, with the S&P 500 softw
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