The past week saw four IPOs produce insignificant returns. All four deals finished the week at or above the offer price, but none gained more than 5%. The first bank IPO of 2016, Argentina-based Grupo Supervielle dual listed in New York and Buenos Aires; its $281 million IPO raised more than the other three small health care deals combined.
| IPO Pricings Week of May 16th, 2016 | |||||
| Issuer Business |
Deal Size ($mm) |
Market Cap ($mm) |
Price vs. midpoint |
First day return |
Return at 5/20 |
| Grupo Supervielle (SUPV) |
$281 | $782 | -8% | +4.5% | +4.5% |
| Argentine bank with over $2 billion in assets. |
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| Pulse Biosciences (PLSE) | $20 | $51 | 0% | +4.3% | +3.3% |
| Developing a device that uses pulsed electric fields.to treat solid tumors. |
|||||
| PhaseRx (PZRX) | $19 | $60 | -17% | +0.4% | +1.8% |
| Preclinical biotech developing treatments for inherited enzyme deficiencies in the liver. |
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| Merus (MRUS) | $55 | $158 | -33% | +0.4% | +0.0% |
| Developing bispecific antibody treatments for solid tumors. |
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Grupo Superveille (SUPV) - This family-owned Argentine bank dual listed on the NYSE and in Buenos Aires, the country's first IPO since 2010. It raised 12% more than expected by offering additional shares at the low end of the range. The deal's completion reflects the optimism surrounding the newly elected President Macri's market-friendly attitude. Since the new administration was sworn in, they have removed restrictions on both FX and lending, settled with holdout creditors and laid out a plan to bring annual inflation down to 5% from 30% currently.
Merus (MRUS) - Backed by notable investors Novo, Novartis, J&J and Pfizer, this biotech struggled to impress investors; it priced 33% below the midpoint and traded flat. Key peer Affimed, a biotech also developing bispecific antibodies, has had similarly poor performance. Up to $33 million of the IPO (60%) was covered by insiders.
Two micro-cap health care companies, Pulse Biosciences (PLSE) and PhaseRx (PZRX) also priced IPOs this week. Neither seemed to attract much attention from investors, trading up less than 5%. CF Corporation (CFCOU), a blank check company run by veterans from Blackstone and FNF, raised $600 million in its public listing. The largest SPAC since 2008 priced at $10 and ended its first day down $0.01, though the stock price has little impact on the company.
Three deals set terms and two withdraw
Healthcare claims auditor Cotiviti Holdings (COTV) set terms to raise $225 million, wallboard and ceiling systems distributor GMS (GMS) set terms to raise $154 million and pulmonary hypertension biotech Reata Pharmaceuticals (RETA) set terms to raise $60 million. All three are set to price the week of May 23. Oil and gas E&P Freeport McMoRan Oil & Gas (FMOG) withdrew its plans for an estimated $1 billion IPO and fungal infection biotech Viamet Pharmaceuticals (VMET) withdrew its plans for an $86 million IPO.
IPO Pipeline Update
Just one micro-cap company submitted an initial filing this week, drone developer AgEagle (UAVS), which filed with a deal size of $10 million. However, some notable companies updated financials, including for-profit education company Laureate Education (LAUR), global contract research organization inVentiv Group Holdings (VTIV.RC), AIG spinoff United Guaranty (UGC), audiovisual IT provider PSAV (PSAV) and Global Medical REIT (GMR).
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IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. The Renaissance IPO Index is down 6% year-to-date, while the Nasdaq is down 5% (S&P flat). Renaissance Capital's IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include Alibaba (BABA), Synchrony Financial (SYF) and Citizens Financial Group (CFG). The Renaissance International IPO Index is down 4% year-to-date, compared to -1% for ACWX. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include NN Group and Aena S.A. To find out if this is the best ETF for you, visit our IPO Investing page.
