Sandwiched between the election and Thanksgiving, the US IPO market had another slow week for new offerings. Meanwhile, recent news and a string of initial filings signals that companies are preparing for IPOs in December and early 2017. Those plans are supported by the S&P 500's two-week rally of +4.7%; during the same time, year-to-date performance for 2016 IPOs has surged from +16% to +31%.
2 IPOs priced this past week: A micro-cap biotech and a SPAC
Motif Bio (MTFB), which is developing antibiotics for drug-resistant bacteria, raised $17 million in a US IPO (as much as 50% from insider Invesco), or $25 million including a European placement. Listed on London's AIM market (MTFB), the late-stage biotech launched its IPO in July when shares traded at $12.42, priced the IPO with warrants at $6.98, and slid 20% to $5.59 on its debut.
Hunter Maritime Acquisition (HUNTU), a blank check company led by members of Belgium's Saverys shipping family, raised $150 million and finished Friday down 0.5%. It targets drybulk shipping companies, which have been under pressure for most of the year. However, in the past two weeks, Scorpio Bulkers (NYSE: SALT) and Navios Maritime (NYSE: NM) have skyrocketed over 50% each. Morgan Stanley was lead left on the deal, its first time in that role for a SPAC IPO in at least ten years. We do not include SPACs in our IPO stats.
| 6 IPOs Filed During the Week of November 14th, 2016 | ||||
| Issuer Business |
Est. Deal Size ($mm) |
LTM Sales | EBIT% | Lead Underwriter |
| Ardagh Group (ARD) |
$1,500 | $6,092 | 8% | Citi |
| Global provider of metal and glass containers for consumer packaged goods. |
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| trivago (TRVG) | $400 | $735 | -7% | J.P. Morgan |
| Online global hotel search aggregator being spun out of Expedia. |
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| Optiv (OPTV) | $100 | $943 | 6% | Morgan Stanley |
| Cyber security services provider formed from Accuvant and FishNet merger. |
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| BeyondSpring (BYSI) | $100 | - | - | Citi |
| Developing a cancer therapy to combat the loss of white blood cells. |
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| Ichor Holdings (ICHR) | $86 | $339 | 4% | Deutsche |
| Provides fluid delivery subsystems for semiconductor equipment manufacturers. |
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| China Gewang Biotech (CGWB) | $12 | $26 | 28% | ViewTrade |
| Wholesale distributor of nutritional supplements in China. |
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March of the unicorns
The IPO market's big news this past week was Snap's reported confidential filing; the IPO could value the social media platform at as much as $25 billion in a 1Q17 IPO. The CEO of Airbnb told Wired that an IPO could be in the cards in 2017. Meanwhile, Spotify's ratchet should encourage it to move forward as well.
6 initial filings signal IPO pickup on the horizon
Ardagh Group (ARD), a global metal and glass container company, shelved plans for an IPO of its metal can subsidiary (Oressa; ORES) in favor of a US IPO that we estimate could raise $1.5 billion as soon as February.
The other five filings come from IPOs that could arrive in December. Fast-growing hotel search provider trivago (TRVG) filed for a $400 million IPO as Expedia (Nasdaq: EXPE) seeks to complete a spin-off four years after it bought the company. Blackstone-backed cyber security firm Optiv (OPTV) filed to raise $100 million. Semiconductor equipment company Ichor (ICHR), backed by Francisco Partners, filed to raise $86 million.
Cancer biotech BeyondSpring (BYSI), owned by its founding China-based CEO, filed to raise $100 million, and nutritional supplement distributor China Gewang (CGWB) filed with a $12 million deal size.
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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 up 0.3% year-to-date, while the S&P 500 is up 6.7%. Renaissance Capital's IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include Alibaba (BABA) and Citizens Financial Group (CFG). The Renaissance International IPO Index is down 5.8% year-to-date, compared to -0.6% for ACWX. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include Recruit Holdings and Cheil Industries. To find out if this is the best ETF for you, visit our IPO Investing page.
