Monday began the annual late-August lull in the IPO market, but even as deal flow cools, recent trading shows that growth IPOs are hotter than at any point this past year. In particular, several recent tech IPOs have been on a tear over the last few weeks. Their overall performance points to an increased risk appetite on the part of investors and suggests a pickup in activity when deals resume after Labor Day. Earlier this month, JPMorgan’s head of equity capital markets stated that the bank had more than 20 global IPOs lined up for September, and Business Insider reported that three tech companies are ready to file as soon as next week.
Monday saw notable gains from Talend (TLND; +24% on Monday), Twilio (TWLO; +10%), Impinj (PI; +9%), Acacia Communications (ACIA; +6%) and LINE (LN; +5%). Except for Talend, each had already posted strong gains in the prior two weeks. Of the seven tech IPOs this year that have raised over $25 million, all are above their offer price and the average return is +117%. The year's two best-performing IPOs are Acacia (+345%) and Twilio (+290%), both of which blew out conservative estimates in their first public earnings releases last week. In sixth is Talend (+73%). The two tech deals that have not gained over 30% are SecureWorks (SCWX; +1%), the slowest-growing of the seven, and China Online Education (COE; +14%), the smallest.
Growth has also been rewarded outside of the tech sector, evident in the year's two best-performing LBOs. SiteOne Landscape Supply (SITE), up 83%, boasts 7% organic growth before acquisitions. Cotiviti (COTV), up 61%, expects top-line growth of over 10%.
| Strong Returns from 2016 Tech IPOs | |||||
| Company (Ticker) | Offer date | Deal Size ($mm) |
First-Day Pop |
IPO Return 8/15 |
Price on 8/15 |
| Acacia Communications (ACIA) | 05/12/16 | $104 | 34.6% | 344.9% | $102.33 |
| Twilio (TWLO) | 06/22/16 | $150 | 91.9% | 289.8% | $58.47 |
| Talend (TLND) | 07/28/16 | $95 | 41.7% | 72.8% | $31.11 |
| Impinj (PI) | 07/20/16 | $67 | 28.4% | 55.0% | $21.70 |
| LINE (LN) | 07/11/16 | $1,149 | 26.6% | 40.3% | $46.07 |
| China Online Education (COE) | 06/09/16 | $46 | -0.1% | 13.7% | $21.60 |
| SecureWorks (SCWX) | 04/21/16 | $112 | 0.0% | 0.9% | $14.13 |
