National Commerce raised $33 million and then the Birmingham bank bounded. Two small medical device companies struggled as SteadyMed had a shaky opening and another pushed its IPO to next week.
IPO highlights during the week of March 16, 2015:
• Two IPOs: A successful bank offering and a struggling device company
• This year's 29 IPOs now trade around their highest average yet: +18% total return
• GoDaddy was added to the IPO calendar
March Madness mimics IPO market: Birmingham bank up 11%
Birmingham has two reasons to celebrate this weekend. In addition to UAB's major NCAA upset over Iowa State, Birmingham-based National Commerce (NCOM) raised $33 million to become the third and largest bank IPO of 2015 after two other small regional players, County Bancorp (ICBK; +28%) and Avenue Financial (AVNU; +17%). The Birmingham bank priced at the midpoint and gained 11% by Friday. Despite its relatively high efficiency ratio (68%), IPO investors likely put their trust in its experienced management team to continue improving operations. The favorable reception of these bank IPOs could bode well for Tennessee-based Franklin Financial Network (FSB), which set terms to raise $61 million on the NASDAQ next week.
Steady as she goes... down: SteadyMed breaks, then ends up 1%
SteadyMed (STDY) priced 35% below its midpoint, opened below its offer price, and finished Friday up just 1%. The last IPO to target pulmonary arterial hypertension, Bellerophon (BLPH), also had an unimpressive debut in February.
Valeritas (VLRX) was scheduled to be the week's largest IPO by deal size and market cap, but the insulin device maker pushed back its $75 million offering to next week. The company must raise at least $40 million through an IPO in March to avoid loan penalties.
| IPO pricings (week of March 16, 2015) | |||||
| Company (Ticker) | Business | Deal Size ($mm) | IPO Price vs. Midpoint | First-Day Pop | Return as of 3/6 |
| National Commerce (NCOM) | Nashville bank | $33 | 0% | 8% | 11% |
| SteadyMed (STDY) | Pump device for PAH | $40 | -35% | 1% | 1% |
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IPO market snapshot
The Renaissance IPO Index, a market cap weighted basket of newly public companies that is designed to represent the US IPO market, has traded up 8% year-to-date, compared to +2% for the S&P 500. The IPO market remains open to new issuance. Renaissance Capital's IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include Zoetis (ZTS), Twitter (TWTR), Alibaba (BABA), Hilton (HLT) and Ally Financial (ALLY). To find out if this is the best ETF for you, visit our IPO investing page.
