IPO lawyers got creative this week, as multiple deals filed prospectuses that rely on a rarely-used rule in order to bypass the closed SEC. That rule allows companies to file with a fixed IPO price and go effective 20 days later. That route adds new risks, both for investors committing to purchase shares weeks later, and the company not getting the SEC's explicit approval.
Nevertheless, on Wednesday, Gossamer Bio (GOSS) set its proposed IPO price at $16, planning to raise $230 million at a valuation of $1.0 billion. New Fortress Energy (NFE), which had been scheduled to price this past week at a range of $17-$19, also decided to go the 20-day route, and filed on Friday with a new price of $15.
And then on Friday afternoon, the shutdown ended. Either company can now choose to stay the course and price in mid-February, or attempt to get SEC approval in the coming week or two. With the SEC opening its doors on Monday, we also expect a wave of biotech IPOs to launch their roadshows.
More good news for the IPO market: This week, the Renaissance IPO Index continued to rapidly recoup its 4Q18 losses, gaining 1.7%, compared to a loss of -0.2% for the S&P 500.
There were no initial filings this past week, which we attribute to companies preparing their audited year-end financials.
