Neobank Chime to ride wave of IPO enthusiasm, while CoreWeave is best performing offering

Greetings, Term Sheeters. This is finance reporter Luisa Beltran, subbing for Allie.

After Circle’s standout IPO performance last week, all eyes are turning to Chime Financial. The well-known neobank is scheduled to begin trading on Thursday and could benefit from a rush of IPO excitement.

The company is selling 32 million shares at a price range of $24 to $26, with the final price for the offering to be set on Wednesday. Nearly 26 million of the shares being sold are coming from the company itself, while the rest will come from selling stockholders. Chime will trade Thursday on the Nasdaq under the ticker CHYM.

Founded in 2012, Chime offers traditional financial services, like fee-free checking and savings accounts, to lower income U.S. consumers who earn up to $100,000 a year. The Chime IPO appears to be oversubscribed and has seen investor demand exceeding the number of shares available by more than 10 times, according to Seeking Alpha, which cited a Bloomberg report.

After crawling for more than three years, the IPO market is finally experiencing a rebound, though it’s unclear whether that will last. Several companies, including eToro Group, Hinge Health, and MNTN, posted strong debuts in May and each has since remained above its IPO price. The best performance by a newly public company so far this year belongs to AI infrastructure company CoreWeave, despite a less than ideal start. CoreWeave went public in late March, around the time when President Trump announced his “Liberation Day” tariffs, which caused many IPOs and deals to be put on hold. CoreWeave turned in a lackluster first day, with shares closing one penny above its $40 IPO price. Its stock rose in April and really began to gain steam in May. As of late Tuesday, CoreWeave’s shares were up 287% from its $40 IPO price.

Retail investors often get shut out of the IPO market, but CoreWeave shows that there are still opportunities to invest in undervalued companies, said Matt Kennedy, senior IPO strategist at Renaissance Capital, a provider of pre-IPO research that manages two IPO-focused ETFs (NYSE: IPO, IPOS). (Shareholders who bought CoreWeave on March 31, when the stock closed at $37.08, have seen the shares soar more than 317% since then.) “Even in a hot area like AI there can be opportunities that fly under the radar,” he said.

Then there’s crypto firm Circle, which raised $1.05 billion with its IPO. Circle shares rocketed 168% during its June 5 debut. The stock gained during its next two trading sessions but lost ground on Tuesday, with shares falling 8%. Circle is currently up more than 241% from its $31 IPO price.

Story ContinuesCircle delivered the “the best first day pop for a $1 billion IPO in our records. That’s quite an achievement,” Kennedy said.

Both CoreWeave and Circle have benefited from a wave of enthusiasm engulfing the IPO market, Kennedy said. He expects that excitement to extend to Chime. The fintech has shown tremendous growth over the last few years and is now turning the corner on profitability, said Kennedy. Chime narrowed its net loss to $25.3 million in 2024, compared to losses of $203.2 million in 2023, and reported net income of nearly $13 million in the first quarter.

FOMO, or fear of missing out, will also help Chime. The fintech has “brand recognition, growth and a lot more people are following the IPO market now than a month ago. Once traders start to see pops are possible that will get people interested,” Kennedy said.

Chime was valued at $25 billion in 2021, the height of the IPO market, but is now chasing an $11 billion valuation, a more than 50% drop. Kennedy thinks Chime could pop. “When excitement builds, you will see people pour into these companies,” he said.

See you tomorrow,

Nina Ajemian curated the deals section of today’s newsletter. Subscribe here.

Introducing Fortune AIQ

AI is reshaping work. What does it mean for your team? Fortune has unveiled a new hub, Fortune AIQ, dedicated to navigating AI’s real-world impact. Fortune has interviewed and surveyed the companies at the front lines of the AI revolution. In the coming months, we’ll roll out playbooks based on their learnings to help you get the most out of AI—and turn AI into AIQ. The first AIQ playbook, The “people” aspect of AI, explores various aspects of how mastering the “human” element of an AI deployment is just as important as the technical details.

• Companies are overhauling their hiring processes to screen candidates for AI skills—and attitudes. Read more
• ‘AI fatigue’ is settling in as companies’ proofs of concept increasingly fail. Here’s how to prevent it. Read more
• AI is changing how employees train—and starting to reduce how much training they need. Read more
• AI is helping blue-collar workers do more with less as labor shortages are projected to worsen. Read more
• Everyone’s using AI at work. Here’s how companies can keep data safe. Read more

This story was originally featured on Fortune.com

View Comments