No US IPOs priced during the short holiday week. There were five initial filings; which included two SPACs and three companies raising $100 million or less. Last week's headliner, Blue Apron (APRN), traded down to $7.73, or 23% below its IPO price and 42% below its 2015 private round.
IPO Pipeline Update: Five new filings
Newly-formed commercial mortgage REIT Tremont Mortgage Trust (TRMT) filed to raise $100 million. Denmark-listed diabetes drug company Zealand Pharma (ZLND) submitted plans to raise $86 million in a US IPO, and dermatology biotech Sienna Biopharmaceuticals (SNNA) filed to raise $75 million. The fourth SPAC from investor Mark Ein, Capitol Investment Corp IV (CIC.U) filed to raise $350 million, while MasTec-backed telecom SPAC Pensare Acquisition (WRLSU) is targeting $250 million.
What to expect in July
Although just two delayed deals are on the calendar for next week, activity should pick up in final two weeks of July. Recent biotech filers Clementia Pharmaceuticals (CMTA) and Kala Pharmaceuticals (KALA), both backed by OrbiMed, are notable for have Morgan Stanley and J.P. Morgan as their respective lead underwriters, similar to this past week's filers, Zealand and Sienna. Pet medication producer PetIQ (PETQ) and yoga studio chain YogaWorks (YOGA) are able to launch roadshows on Monday, July 10, while online real estate platform Redfin (RDFN), one of the few high-growth IPOs on file, can launch the following week. Large filers like building materials distributor US LBM (LBM), marketing firm Advantage Solutions (ADV), produce company Dole Food (DOLE) and Huntsman chemicals spin-off Venator Materials (VNTR) are also soon reaching potential launch dates. Low-cost airline Frontier Group (FRNT) is another candidate.
Not all growth is created equal: Blue Apron and Tintri decline this week
Since the start of 2016, virtually all VC-backed tech IPOs have traded well at the outset. Last week's IPOs from Blue Apron (APRN) and Tintri (TNTR) countered that trend, and both traded down this past week. Snap (SNAP) has been in the news for drifting back down to its offer price, and wearables company Jawbone, once valued at over $3 billion privately and on the IPO track, is now shutting down operations. With more established models, 2017 enterprise software providers like Appian (APPN), MuleSoft (MULE), Alteryx (AYX) and Okta (OKTA) are each still up over 35%.
As we noted in our US IPO 2Q Review, the need for cash should drive more tech IPOs in the 2H17, regardless of hoped-for valuations. Both Blue Apron and Tintri spent heavily to maintain growth, and even took on debt. Buying power appears firmly in the hands of investors.
IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. The Renaissance IPO Index is up 18.7% year-to-date, ahead of the S&P 500, which is up 7.6%. 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 17.1% year-to-date, while the ACWX is up 12.5%. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include ABN AMRO Group and Worldpay.
To find out if this is the best ETF for you, visit our IPO Investing page.
