Only two companies came public this week, raising $347 million, with both ending the week roughly even with their IPO prices.
National Storage Affiliates REIT (NSA) priced 19% below the midpoint and traded up just 1% by Friday close. The self-storage roll-up likely turned off investors with its complex and unproven equity incentive structure. Based on historical distributions, the REIT could offer a nearly 6% yield, vs. 3% for its larger peers.
Apigee (APIC) priced at the midpoint but finished below its offer price on Friday (down 2%) despite a low float (insiders bought a third of the deal). Although the company boasts high billings growth with expanding margins and large blue chip customers, the market for third-party API development is still largely undefined, and Apigee's heavy losses and large competitors might worry investors. Apigee is the second enterprise software IPO this year, following data storage provider Box (BOX; up 31%).
| IPO pricings (week of April 20, 2015) | |||||
| Company (Ticker) | Business | Deal Size ($mm) | IPO Price vs. Midpoint | 1st-day Pop | Return as of 4/24 |
| National Storage Affiliates Trust (NSA) | Self-storage REIT |
$260 | -19% | 0% | 1% |
| Apigee (APIC) | API software provider | $87 | 0% | -2% | -2% |
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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 over 7% year-to-date, compared to less than 1% for the S&P 500. This suggests that the IPO market remains open to new issuance. Renaissance Capital's IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include Twitter (TWTR), Alibaba (BABA), Hilton (HLT), JD.com (JD) and Ally Financial (ALLY). To find out if this is the best ETF for you, visit our IPO investing page.
