Companies are continuing to rush out IPOs before the mid-August lull.
This past week saw 11 IPOs and one SPAC raise $3.4 billion. Nine went public with market caps over $1 billion, including Chinese e-commerce app Pinduoduo, the sixth-largest tech company ever to list in the US. It and other growth stocks took home the best returns, led by VC-backed fuel cell maker Bloom Energy. As expected, Tenable continued a hot streak in the high-growth software space, pricing well above the midpoint and popping 32%. Berry Petroleum, the first oil and gas E&P of the year, priced down and broke issue.
| 11 IPOs and 1 SPAC During the Week of July 23rd, 2018 | |||||
|---|---|---|---|---|---|
| Issuer Business |
Deal Size |
Market Cap at IPO |
Price vs. Midpoint |
First Day Return |
Return at 07/27 |
| Bloom Energy (BE) | $270M | $1,842M | 7% | +67% | +51% |
| Sells clean energy power generators based on solid oxide fuel cell technology. | |||||
| Tenable Holdings (TENB) | $251M | $2,426M | 28% | +32% | +33% |
| Provides analytics-based vulnerability management software to enterprises. | |||||
| Pinduoduo (PDD) | $1,626M | $23,812M | 9% | +41% | +29% |
| Operates an e-commerce marketplace centered on group buying in China. | |||||
| Endava (DAVA) | $127M | $1,112M | 11% | +26% | +26% |
| Provides outsourced IT development services. | |||||
| Focus Financial Partners (FOCS) | $535M | $2,018M | -11% | +14% | +15% |
| Operates a national network of more than 50 independent wealth managers. | |||||
| Cango (CANG) | $44M | $1,683M | 0% | +14% | +10% |
| Online car marketplace for businesses and consumers in China. | |||||
| Opera Limited (OPRA) | $115M | $1,374M | 9% | +9% | +9% |
| Leading provider of mobile and PC browsers in emerging markets. | |||||
| Greenland Acquisition (GLACU) | $40M | $53M | 0% | +1% | +1% |
| Blank check company formed to acquire a Chinese technology-enabled service business. | |||||
| Aquestive Therapeutics (AQST) | $68M | $370M | 0% | +7% | +1% |
| Drug manufacturer developing oral film formulations of CNS disease therapies. | |||||
| Aurora Mobile (JG) | $77M | $1,095M | -11% | +4% | +0% |
| Offers targeted mobile marketing campaigns and various app services in China. | |||||
| Liquidia Technologies (LQDA) | $50M | $175M | 0% | +1% | +0% |
| Developing engineered formulations of therapies for PAH and pain. | |||||
| Berry Petroleum (BRY) | $183M | $1,258M | -13% | -5% | -5% |
| California-based onshore oil production company. | |||||
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Bloom Energy raised $270 million by offering 18.0 million shares at $15, the high end of the $13 to $15 range. Investors bet that it had finally reached a tipping point on growth and upcoming profitability, and the deal popped 67%, before settling to a gain of 51% by Friday. Bloom Energy listed on the NYSE under the symbol BE. J.P. Morgan, Morgan Stanley, Credit Suisse, KeyBanc Capital Markets and BofA Merrill Lynch acted as lead managers on the deal.
Tenable Holdings raised $251 million by offering an upsized 10.9 million shares at $23, above the upwardly revised range ($20-$22) and original range ($17-$19). The fast-growing cybersecurity software provider popped 32%. Tenable plans to listed on the Nasdaq under the symbol TENB. Morgan Stanley, J.P. Morgan, Allen & Company and Deutsche Bank acted as lead managers on the deal.
Pinduoduo raised $1.6 billion by offering 85.6 million ADSs at $19, the high end of the $16 to $19 range. Insiders indicated an interest in purchasing up to $500 million on the IPO (31% of the deal size). By market cap ($24 billion), Pinduoduo is the year's largest company to IPO in the US. The company raced up 41% initially, but finished the week 29% above its offer price. Pinduoduo listed on the Nasdaq under the symbol PDD. Credit Suisse, Goldman Sachs (Asia), CICC and China Renaissance acted as lead managers on the deal.
Endava raised $127 million by offering an upsized 6.3 million shares at $20, above the range of $17 to $19. Its growth and margins appealed to investors, and the outsourced IT services provider popped 26%. Endava listed on the NYSE under the symbol DAVA. Morgan Stanley, Citi, Credit Suisse and Deutsche Bank acted as lead managers on the deal.
Focus Financial Partners raised $535 million by offering 16.2 million shares at $33, below the range of $35 to $39.At IPO, the company commanded a market cap of $2.0 billion. The stock traded up to about $38 for a 15% gain. The company relies on acquisitions for growth, but it has plenty to choose from in its highly fragmented market. Focus Financial listed on the Nasdaq under the symbol FOCS. Goldman Sachs, BofA Merrill Lynch, KKR, BMO Capital Markets, RBC Capital Markets and SunTrust Robinson Humphrey acted as lead managers on the deal.
Cango raised $44 million by offering 4.0 million ADSs at $11, the midpoint of the $10 to $12 range. The Chinese auto purchasing platform originally planned to offer 12.5 million ADSs before slashing its proposed deal size, and disclosing that up to 100% of the deal was covered by Chinese auto companies. They ended up buying 85% of the deal, meaning that just $6.6 million went to public investors (0.4% of the IPO market cap). Cango listed on the NYSE under the symbol CANG. Morgan Stanley, BofA Merrill Lynch and Goldman Sachs (Asia) acted as lead managers on the deal.
Opera Limited raised $115 million by offering 9.6 million shares at $12, the high end of the $10 to $12 range. It traded up 9% on its debut. It has solid growth, margins and market position in the attractive browser market, but relies heavily on Google for revenue, which is also a competitor. At IPO, the company commanded a market value of $1.4 billion. Opera listed on the Nasdaq under the symbol OPRA. CICC and Citi acted as lead managers on the deal.
Aquestive Therapeutics raised $68 million by offering 4.5 million shares at $15, within the range of $14 to $16. Manufacturing and developing formulations of existing drugs, Aquestive finished the week 1% above the offer price. It listed on the Nasdaq under the symbol AQST. BMO Capital Markets and RBC Capital Markets acted as lead managers on the deal.
Aurora Mobile raised $77 million by offering 9.1 million ADSs at $8.50, the low end of the range of $8.50 to $10.50. The China-based mobile advertising technology provider finished at its offer price. Aurora listed on the Nasdaq under the symbol JG. Goldman Sachs (Asia), Credit Suisse and Deutsche Bank acted as lead managers on the deal.
Liquidia Technologies raised $50 million by offering 4.55 million shares at $11, within the range of $10 to $12. Insiders had intended to purchase $30 million of the IPO (60% of the deal). Liquidia traded flat. At IPO, the company commanded a fully diluted market value of $175 million. Liquidia Technologies listed on the Nasdaq under the symbol LQDA. Jefferies and Cowen acted as lead managers on the deal.
Berry Petroleum slashed its deal size and $183 million by offering 13.0 million shares below the range at $14 (33% insider selling). The company originally filed to raise $300 million (57% insider selling). It traded off 5%. Berry Petroleum listed on the Nasdaq under the symbol BRY. Goldman Sachs, Wells Fargo Securities, BMO Capital Markets, Evercore ISI and UBS Investment Bank acted as lead managers on the deal.
US IPO Pipeline Update: Just 1 New Filing
| 1 Filing During the Week of July 23rd, 2018 | |||
|---|---|---|---|
| Issuer Business |
Deal Size |
Sector | Lead Underwriter |
| Tiziana Life Sciences (TLSA) | $12M | Health Care | Laidlaw (UK) |
| Developing antibody therapies to combat NASH, Crohn's disease, MS, and cancer. | |||
IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. The Renaissance IPO Index is up 10.2% year-to-date, while the S&P 500 is up 7.3%. 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 5.0% year-to-date, while the ACWX is down 1.2%. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include Delivery Hero and Siemens Healthineers.
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