Dip to Rip

Both public and private equity markets have almost fully retraced their “Liberation Day” (4/2) losses. While the Covid 19 selloff and recovery was steeper, this most recent rally marks one of the faster public equity recoveries from a bear market (i.e. S&P selling off >20%) on record. For the two weeks from 4/21-5/2 the S&P500 traded up 9 days in a row (and 10%), which has not happened since 2004. Since “Liberation Day” on 4/2 the SP500/Nasdaq100 are now +1%/+3%. Our NPM Private Market Tracker*, which shows the estimated average price performance of the 170 largest names in our internal Tape D® data, is +1%.

In private markets, perhaps the biggest news of the week came from its second most valuable company, OpenAI. OpenAI committed to investors in late 2024 that it would convert to a for profit entity within two years. Without delving too much into the company’s unique and convoluted structure, there are currently both non-profit and for-profit entities under a single umbrella, but board control rests with the non-profit. On Monday, OpenAI reversed course in a letter from CEO Sam Altman that indicated changes to the restructuring plan, in part driven by conversations with the CA and DE attorneys general. The key changes are (1) control of the overall entity’s Board will remain at the non-profit and (2) the for-profit entity will become a Public Benefit Corporation (“Bcorp”). (Source: OpenAI)

However, several elements remain unchanged, including (1) caps from returns to existing equity investors will be removed and (2) existing profit share interests will be converted to common shares. Partner Microsoft still needs to approve any changes, so we expect there will be more updates to write over time.

We would point out that B-corps can still IPO, with Warby Parker in 2021 being a recent example. (Source: Forbes; Bloomberg) However, continued uncertainty over the OpenAI restructuring has the potential, in our view, to delay the IPO exit for which some investors were hoping. This example is yet another instance of IPO timelines slipping to the right, and increasing the need for private market solutions, such as tenders.

BIGGEST MOVERS AND TOPICAL NAMES

Based on our proprietary Tape D® data, the best performers in the private market since the 4/2 “Liberation Day” have been x.AI (+23% estimated share price performance), Anduril Industries (+22%) and shared bike/scooter company Neutron Holdings (+13%).

RECENT EVENTS

• The Trump administration announced a new trade deal with the UK.(5/8; Bloomberg)
• Cybersecurity firm Crowdstrike is cutting 500 jobs (5% of workforce). (5/7; Bloomberg)
• Apple announced it was exploring adding AI search to its browser, considering Anthropic, Deepseek, Perplexity and Grok. (4/30; Bloomberg)
• Palantir stock fell 8% Monday on an earnings miss, despite raising guidance for the year. (5/5; Bloomberg)

NOTABLE CAPITAL RAISES

• Robotics startup Foundation in talks to raise $100mm at a $1bn valuation (5/7; The Information).
• Wonder, a vertically integrated food delivery and meal kit company that owns Grubhub and Blue Apron, raised $600mm at a $7bn valuation. (5/6; Strictly VC)

NOTABLE EXITS

• OpenAI agreed to buy AI assisted coding tool firm Windsurf for $3bn. (5/7; Bloomberg)
• Israel based trading and investment platform EToro Group Ltd. launched its US IPO, after delaying the IPO earlier this year over tariff concerns. (5/5; Bloomberg)