Three of the five IPOs on Thursday ended below their offer price as the group averaged -3%, signaling choppy waters in the IPO market.
MOL Global loses 35% on its debut and two more IPOs break issue
MOL Global (MOLG), a Malaysian provider of online payment services mainly used for game credits, priced at the low end of its proposed range and plummeted 35%, giving it the worst first-day performance for an IPO in over ten years. The company hopes to be the PayPal of Southeast Asia, but IPO investors appeared unconvinced.
Two more IPOs break issue price
USD Partners LP (USDP), a stable growth MLP with long-term fixed-fee take-or-pay contracts, failed to generate traction and fell 6%. Owned by USD Group (Goldman Sachs and Energy Capital Partners), the company will operate a major crude-by-rail terminal in Hardisty, Canada. Down 0.4%, OM Asset Management (OMAM), the US asset management arm of London-based insurer Old Mutual, highlights the ongoing poor reception of finance IPOs and asset managers in particular.
A high-growth SaaS and small Texas bank trade positive
Top performer HubSpot (HUBS), which offers a marketing SaaS platform, priced above its range and opened trading 32% above the offer price, but finished the day up 20%. A very small Dallas-based bank, Veritex Holdings (VBTX) traded up 5%.
Unfavorable market conditions (the VIX volatility index spiked 24% today to close just shy of 19, the highest level since February) could weigh on future deals, including the two on the IPO calendar for tonight, Diplomat Pharmacy (DPLO) and Dave & Buster's (PLAY).
| Five IPOs face headwinds on October 9 | ||||
| Company (Ticker) | Business | Deal Size ($mm) | IPO Price vs. Midpoint | First Day Return |
| HubSpot (HUBS) |
Marketing automation SaaS platform |
$125 |
25% |
20% |
| Veritex Holdings (VBTX) |
Dallas bank with 8 branches |
$35 | 0% | 5% |
| OM Asset Management (OMAM) | Asset management arm of Old Mutual | $308 | -13% | -0.4% |
| USD Partners LP (USDP) |
MLP: oil and gas rail terminals |
$40 | -15% | -6% |
| MOL Global (MOLG) | Online payments in Southeast Asia |
$169 | -7% | -35% |
64% of last week's IPOs trade below issue; hot tech stocks cool off
Of the 11 IPOs that priced last week, 7 trade below their IPO price, and the group averages a -5.8% total return (including -4% in post-IPO trading). High-growth e-commerce company Wayfair (W), which had the group's best first-day pop (+30%), has since tumbled and broke issue on Thursday, ending 2% below the IPO price. SaaS provider Yodlee (YDLE) also continued to fall, and now has a gain of just 4%.
