Livingston, New Jersey (population 31,330) has always punched above its weight. Its residents have included Seinfeld’s Jason Alexander, my novelist brother Harlan, and Genovese crime family capo Ritchie “The Boot” Boiardo, who some say inspired The Sopranos. Its main landmark is the Livingston Mall, which opened to great fanfare in 1972 and has since slid into decline and is facing condemnation. I used to go there as a kid.
Livingston isn’t perfect, but it’s my hometown. So imagine my excitement when I saw that CoreWeave, an AI-infrastructure company whose headquarters are a 10-minute drive from my childhood home, was preparing a blockbuster IPO on Nasdaq, outshining Sand Hill Road’s darlings with a sky-high valuation.
But then reality struck like a pothole on the New Jersey Turnpike.
The IPO has now been downsized, the price range slashed, and the buzz has long faded. CoreWeave, a cloud-computing firm that rents out GPUs to AI companies, was supposed to be a marquee offering, proof that the IPO market was roaring back after years in the wilderness. Instead, it has become the latest exhibit in a troubling trend: IPO enshittification, where the public markets are offered the runt of the litter.
“Enshittification” is a term coined by journalist Cory Doctorow to describe how platforms and services decay over time. They start out great, enticing users with quality. Then, as profits take precedence, they degrade, squeezing customers, suppliers, and, eventually, themselves. His thesis focused on social media: once vibrant, now clogged with ads and algorithmic sludge. The same rot is taking hold in the IPO market.
There was never a golden age of IPOs, but some of the greatest companies went public early, rewarding investors willing to take the risk. The IPO marked not just a fundraising event but a cultural milestone, a corporate coming-of-age ritual, a chance to shine or stumble. An entire ecosystem — equity capital markets originators, syndicate desks, salesforces, research analysts, portfolio managers, buy-side analysts — grew around it, a symbiotic dance of capital and opportunity.
It wasn’t perfect but it was the best finance show in town.
Over time, the process has soured. Investment banks, eager to win deals, overpromise on valuations, inflating client expectations. This isn’t new, but it feels like it has become more pronounced. Meanwhile, the explosion of private capital, driven by low interest rates and other advantages, has made public markets less attractive. Companies no longer need IPOs to fund growth; they turn to them when they’re out of options.
CoreWeave isn’t alone in its struggles. Earlier this year, Venture Global, a liquefied-natural-gas exporter, tried to cash in on Europe’s energy crisis and excitement over Donald Trump’s election by seeking a nosebleed valuation. Investors weren’t fooled. The company reduced its valuation by more than 40 per cent to get the IPO out the door, only for the shares to plunge almost 60 per cent in the after-market. Like CoreWeave, it had glaring red flags: massive litigation, huge execution risks, and a valuation propped up by temporary price spikes.
These aren’t the kinds of companies that should be leading an IPO revival. Ideally, thoroughbred companies would lead the charge, much like Google’s 2004 debut following the dotcom collapse (the IPO priced below the range but traded well in the after-market) or AIA’s 2010 offering after the financial crisis. Instead, the market’s reopening features firms unable to secure private funding, desperate for cash to survive, or banking on investors overlooking their shortcomings in favour of hot trends.
The public markets risk becoming a dumping ground. When the best assets are hoarded by private equity firms, venture capitalists, sovereign-wealth funds, and family offices, the IPO market gets the leftovers. As FTAV wrote on Thursday, CoreWeave, for all its AI hype, has massive debts, huge capex requirements, mounting losses, rapidly depreciating assets, a slew of related-party dealings, and a significant dependence on just two customers (Microsoft and Nvidia). Yet here it was, looking for public investors willing to take the plunge. CoreWeave is seeking public investment not from a position of strength, but out of necessity.
The same pattern played out with WeWork and other cautionary tales — companies that didn’t go public because they were ready but because they had no other choice. The IPO market is ostensibly the showcase for the best and brightest. Now, increasingly, it’s the venue for the desperate and the distressed, a place where overhyped, overleveraged, and overrated companies try to hang on long enough for insiders to exit.
This shift isn’t just about a few bad listings; it reflects a fundamental realignment of capital flows. Private markets have ballooned, while the number of public companies in the US has roughly halved since the 1990s. Startups no longer need to go public when they can raise billions from private sources. By the time they reach the public markets, the easy money is gone.
If CoreWeave and Venture Global represent the vanguard of the IPO revival, we’re in trouble. Public markets should be a launchpad for great companies, not a last resort for troubled ones. The only hope is that enough high-profile flops will force a reckoning, steering investors back towards quality — or at least rational pricing. After all, private shareholders can’t hold on forever. Their own backers are desperate for liquidity, unsold assets are piling up, and the cycle of secondary buyouts, continuation funds, and other financial contortions won’t last indefinitely. Sooner or later, something has to give. When it does, companies will need to come to market with sustainable valuations and capital structures, rather than constantly pushing the limits.
As the fluorescent lights flicker over empty stores, Livingston Mall has gone from representing suburban aspiration to memorialising the decline of in-person shopping. The IPO as a product offers a similar spectacle of decay and lost promise: from a blue-ribbon event in front of cheering throngs to a tired lounge act playing to an indifferent crowd.
