Two micro-cap companies priced US IPOs this past week, raising a combined $86 million. Investors were again eager to bet on growth and technology, with ShotSpotter up 31% on its first day, before trailing off to a 12% gain.
One small IPO also launched; three more sub-$75 million deals are on the IPO calendar for the week ahead.
| 2 IPOs During the Week of June 5th, 2017 | |||||
| Issuer Business |
Deal Size ($mm) |
Market Cap at IPO ($mm) |
Price vs. midpoint |
First day return |
Return at 6/9 |
| ShotSpotter (SSTI) |
$31 | $118 | 0% | +31% | +12% |
| Provides law enforcement with a sensor-based service for detecting gunshots. |
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| Plymouth Industrial REIT (PLYM) |
$55 | $69 | -5% | -4% | -4% |
| REIT owning interests in 20 industrial buildings in the Midwest and Eastern US. |
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Hotshot: ShotSpotter pops
ShotSpotter (SSTI) priced its $31 million IPO at the midpoint, and finished the week up 12%. The company's gunshot detection sensors represent a new solution for police departments looking to combat gun violence, and it has already seen adoption in major cities like New York and Chicago. It grew sales by 50% in the 1Q17, but is still early stage, with just $19 million in trailing 12-month sales and high capex requirements.
Plymouth sinks 4%
Plymouth Industrial REIT (PLYM) priced its $55 million IPO at $19, the low end of the range, giving it a market cap of $69 million and a proposed annual yield of 7.9%. The stock fell 4% on its debut. Investors were likely turned off by its high post-IPO debt and relatively low FFO.
IPO pipeline update
Just one company joined the IPO pipeline this past week: Chemicals manufacturer PQ Group (PQG) is back, after withdrawing a $450 million IPO in 2014 when it was acquired by CCMP. This past week's low filing activity is due to the prior week's rush of seven filings, which aim to price before the July 4th weekend.
IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. The Renaissance IPO Index is up 21.8% year-to-date, ahead of the S&P 500, up 8.6%. Renaissance Capital's IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include Ferrari (RACE) and First Data (FDC). The Renaissance International IPO Index is up 15.1% year-to-date, while the ACWX is up 14.7%. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include Worldpay and ABN Amro. To find out if this is the best ETF for you, visit our IPO Investing page.
