This week saw a diverse group of four IPOs price to generally positive reactions, three had double-digit returns.
Okta (OKTA) was the latest high-growth, high-loss software company to go public this year and like the others it had a stellar performance, closed Friday up 39% after pricing at the high-end of the range (software IPOs have averaged 42% first day pops since 2016).
Elevate Credit (ELVT), an online non-prime loan provider, closed Friday up 14% from its offer, after conceding price (-50% vs. original midpoint) and increasing the number of shares offered. At the IPO price it commands an market value of $265 million, 45% below the original midpoint and 63% below its 2016 attempt as investors were likely put off by its high losses.
Leading US trucker Schneider National (SNDR) raised $550 million and has traded flat after pricing at a discount to peers. Investors were likely put off by the lack of free cash flow. Like other public truckers Schneider should move with the US economy.
Hess Midstream Partners (HESM) priced above the range and continued on to close up 12% in its first day. Its success was likely partly attributable to its well-regarded parent and its above average dividend yield (5.2% at the IPO price).
Brazilian airline Azul (AZUL) had planned to raise $478 million, but was forced to suspend its dual-listed IPO for up to 30 days by Brazil's regulator, which had concerns over management estimates offered in the roadshow.
| IPO Pricings Week of April 7th, 2017 | |||||
| Issuer Business |
Deal Size ($mm) |
Market Cap ($mm) |
Price vs. midpoint |
First day return |
Return at 4/7 |
| Okta (OKTA) |
$187 | $1,950 | +21% | +38% | +38% |
| Provides on-demand identity and access management for enterprises. |
|||||
| Elevate Credit (ELVT) | $81 | $265 | -50% | +19% | +14% |
| Online provider of loans and lines of credits to non-prime consumers. |
|||||
| Schneider National (SNDR) | $550 | $3,297 | 0% | 0% | 0% |
| Second largest US trucking company offering truckload, intermodal and logistics. |
|||||
| Hess Midstream Partners LP (HESM) | $340 | $1,280 | +15% | +11% | +13% |
| MLP formed by Hess and GIP to own gathering/processing assets in the Bakken. |
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Filings activity picks up
March saw 19 companies join the IPO pipeline, the most initial filings in a month since October 2015. High filing activity continued in the first week of April with seven new filers, tying the prior week. The seven included four biotechs, a KKR-backed mortgage REIT, a homebuilder and a bank.
IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. The Renaissance IPO Index is up 10.0% year-to-date, while the S&P 500 is up 5.2%. Renaissance Capital's IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include Ferrari (RACE) and TransUnion (TRU). The Renaissance International IPO Index is up 9.0% year-to-date, while the ACWX is up 7.9%. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include Covestro and ABN Amro. To find out if this is the best ETF for you, visit our IPO Investing page. To find out if this is the best ETF for you, visit our IPO Investing page.
