Fidelity, the largest stock brokerage in the US, has slashed IPO qualification minimums for its customers by at least 75% and up to 95% for certain offerings.
This push to funnel poorer investors into public offerings follows a September in which just five US IPOs raised a paltry $1.9 billion, the slowest US IPO month since March.
In fact, across all US IPOs this year, the equal-weighted average return since each offer price is negative.
Fidelity’s new minimum is just $25,000 from its former $100,000 or higher threshold, including its old $500,000 minimum to participate in certain non-KKR underwritten offerings.
The reduction arrives amid a broad push by brokerages to recruit smaller investors as US listings have slowed to a crawl, weeks before Anthropic’s planned November debut.
Historically, Fidelity has used asset minimums to gate access to brand new, historically risky offerings as a way to limit unsophisticated speculation.
An LA Times columnist described IPO minimums as “protecting small retail clients from plunging into initial public stock offerings while the shares were still subject to IPO-related hype.”
Bloomberg described September as the slowest month since March for US listings. Smart-ring maker Oura, for example, postponed a listing that it hoped would have been worth up to $15.6 billion.
Nuclear group Holtec, along with SoftBank-backed SB Energy, also pulled back its IPO plans. Renaissance Capital analysts wrote that IPO activity has fallen short of expectations.
Fidelity’s permanent, blanket reduction to $25,000 is actually its second reduction this year after counting its one-time SpaceX IPO eligibility reduction in June to $2,000.
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