On Wednesday, two IPOs raised over $200 million and then experienced a double-digit loss on the first day of trading.
Only two IPOs during all of 2014 raised that much capital and then fell 10% or more - King Digital (KING) and Forward Pharma (FWP).
SunRun (RUN) priced at its midpoint and raised $251 million, then dropped 23% on its first day. Only 1% of the 1,620 IPOs in the past 10 years have fallen more than 20% on their debut, including just one other company that raised over $200 million. Amplify Snack Brands (BETR) raised $270 million after pricing above the range, then fell 10%. IPOs that price above the range have gained 40% on average during the first day - with that much initial demand, it is about 3x more likely that the stock will gain 100% than end below the offer price. Close peer Blue Buffalo (BUFF), which also had 100% insider selling, priced above the range and traded up 36% in its late-July IPO.
Just two of the eight have bounced back from their initial drop, including Amplify's close peer WhiteWave Foods (WWAV).
Poor returns continue from last week
Last week, four out of the ten scheduled IPOs failed to price. Of the six that went through, four broke issue on their debut, including the year's worst first-day drop (vTv Therapeutics, VTVT), and all six now trade below the first-day close.
Amplify is the year's second IPO in the consumer sector to have a negative first-day return, after last week's Xcel Brands (XELB); the other ten consumer IPOs average a first-day gain of +42%.
