The US IPO market was quiet this week thanks to the July 4th holiday. Just one blank check company completed a public offering. The big news this week came from connected speaker company Sonos, which filed for an estimated $250 million IPO.
If you haven't read it yet, check out the new 2Q18 US IPO Review, and our special post on how the US IPO market became more American during the quarter. We also published a 2Q18 Global IPO Review (IPO Intelligence only). In non-US news, Xiaomi priced the year's largest global IPO; it begins trading next week.
While nothing is scheduled for next week, the July IPO calendar should quickly pick up based on filing activity in June, which hit a three-year high. Supporting these launches, the Renaissance IPO Index rebounded 2.0% this week, while the S&P 500 gained 1.6%. The VIX Volatility Index improved as well, declining below 15.
The prior week's software IPO Domo (DOMO) traded off almost 20% this week; on Monday we highlighted some possible reasons for the volatility. Some recent US IPOs from China also pulled back, including Uxin (UXIN; -20%).
| 1 IPO During the Week of July 2nd, 2018 | |||||
|---|---|---|---|---|---|
| Issuer Business |
Deal Size |
Market Cap at IPO |
Price vs. Midpoint |
First Day Return |
Return at 07/06 |
| Allegro Merger (ALGRU) | $130M | $166M | 0% | +1% | +1% |
| Blank check company formed by Crescendo Partners' Eric Rosenfeld. | |||||
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Allegro Merger (ALGRU) raised $130 million by offering units that consist of stock, warrants for whole shares and rights for 1/10 shares. CEO Eric Rosenfeld has led five other blank check companies, most recently Harmony Merger, which raised $115 million in 2015 and later acquired LNG logistics company NextDecade (NEXT; -39% from SPAC offer price).
2017 was a 10-year record for SPACs, but 2018 is on pace to beat it. So far this year, 23 SPACs have completed offerings raising $5.2 billion, compared to 15 SPACs that had raised $4.6 billion by this point last year.
IPO Pipeline Update: Sonos files for an IPO
Backed by KKR and several VCs, Sonos (SONO) filed for an estimated $250 million IPO. The company has over $1 billion in sales, and grew 10% in its latest FY. A small Chinese SPAC also filed. Two energy companies moved forward with IPO plans by updating filings: Carbon Energy (CRBO) and AFG Holdings (AFGL). Peruvian food producer Camposol (CMPO.RC) left the pipeline by withdrawing its $460 million US IPO.
| 4 Filings During the Week of July 2nd, 2018 | |||
|---|---|---|---|
| Issuer Business |
Deal Size |
Sector | Lead Underwriter |
| Arlo Technologies (ARLO) | $100M | Technology | BofA ML |
| Intelligent security camera unit being spun out of Netgear. | |||
| Forum Merger II (FMCIU) | $200M | SPAC | Jefferies |
| Black check company formed by SPAC veterans David Boris and Marshall Kiev | |||
| Sonos (SONO) | $250M | Consumer Discretionary | Morgan Stanley |
| Designs and sells connected speakers and audio components. | |||
| Tottenham Acquisition (TOTAU) | $40M | SPAC | Chardan |
| Chinese blank check company formed to acquire a TMT business. | |||
IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. The Renaissance IPO Index has returned 8.0% year-to-date, while the S&P 500 is up 3.2%. Renaissance Capital's IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include Spotify (SPOT) and Snap (SNAP). The Renaissance International IPO Index is down -5.5% year-to-date, while the ACWX is down -4.7%. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include Orsted (DONG Energy) and Samsung BioLogics.
