July 2017's nine IPOs make it the slowest July since 2009. Down from 10 IPOs last year, this is the first month in 2017 to come in below the prior year period. The month's nine deals priced an average of -9% below the midpoint, and averaged a total return of +29%, compared to +9% for IPOs during the 1H16.
New filing activity also declined in July; the seven new filings tie for the slowest July since 2003, suggesting that August IPO pricings could also fall below average. However, the lower number of filings is partly explained by a new SEC rule allowing large filers to file confidentially; these should show up in August and September.
Headlined by high-flying online real estate broker Redfin (RDFN), the month featured an eclectic mix of offerings with three biotechs, a bank, a mortgage REIT, a pet meds company, a gene-edited crop developer and a micro-cap diagnostics firm. One deal failed to price as YogaWorks (YOGA) postponed its IPO.
| July 2017 IPOs | |||||
| Issuer |
Deal Size ($mm) |
Market Cap at IPO ($mm) |
Price vs. midpoint |
First-day return |
Return at 7/31 |
| Akcea Therapeutics (AKCA) | $125 | $521 | -38.5% | +18.5% | +79.9% |
| Redfin (RDFN) | $138 | $1,316 | 15.4% | +44.7% | +60.9% |
| PetIQ (PETQ) | $100 | $331 | 6.7% | +45.8% | +45.5% |
| Sienna Biopharmaceuticals (SNNA) | $65 | $317 | 0.0% | +28.3% | +36.4% |
| Calyxt (CLXT) | $56 | $224 | -51.5% | +40.6% | +34.8% |
| Kala Pharmaceuticals (KALA) | $90 | $389 | 0.0% | +23.3% | +33.9% |
| RBB Bancorp (RBB) | $86 | $390 | 0.0% | +1.5% | +1.4% |
| TPG RE Finance Trust (TRTX) | $220 | $1,214 | -2.4% | -2.1% | -0.5% |
| Co-Diagnostics (CODX) | $7 | $68 | -8.4% | -3.2% | -29.5% |
Renewed skepticism of highly-valued tech startups likely cut into July IPO activity. The most recent tech IPOs, Tintri (TNTR) and Blue Apron (APRN), priced well below their proposed range at the end of June, and both trade below issue. The year's largest tech IPO, Snap (SNAP), is now 20% below its offer price. However, strong initial trading from Redfin suggests that investors can still be enthusiastic over a large and unprofitable growth IPO.
Recent private funding rounds for Elon Musk's SpaceX (SPACE.RC; $350 million round, valued >$21 billion) and co-working space startup WeWork (WWRK.RC; $500 million, >$20 billion) show that private capital has not dried up entirely, but the majority of companies on our PCW should increasingly be pushed to seek public capital or be acquired. As such, we expect activity to pick up post-Labor Day.
