With the government shutdown temporarily over, the SEC opened on Monday and IPO launches began to trickle onto the calendar, including billion-dollar biotech Alector (ALEC) and Virgin Trains USA (VTUS) . The first IPO of 2019, New Fortress Energy (NFE), priced its $280 million IPO at $14, well below the initial range, and finished the week flat. Three SPACs raised $675 million.
New Fortress Energy came to market at a $2.3 billion valuation, offering 20 million shares at a price of $14. The company downsized the offering, priced $1 dollar below its downwardly-revised price target, and added insider buying (25% of the deal). The Fortress-backed owner of LNG liquefaction and regasification facilities, hopes to create an efficient vertically integrated gas-to-power company to deliver US-produced natural gas to the developing world. It plans to bring its first liquefaction plant online in 2021. The company ended its first trading day at $13.07 per share, a return of -6.6%. The company has ambitious plans, but investors were likely wary of its early stage and massive capex requirements.
The Renaissance IPO Index, which is comprised of the largest IPOs of the last two years, is up 1.7% this week bringing the YTD total to 18.0%. That is over double the YTD return of the S&P 500 of 8.0%, and slightly above the 1-week return of 1.5%.
| 4 IPOs During the Week of January 28th, 2019 | |||||
|---|---|---|---|---|---|
| Issuer Business |
Deal Size |
Market Cap at IPO |
Price vs. Midpoint |
First Day Return |
Return at 02/01 |
| Gores Metropoulos (GMHIU) | $375M | $469M | 0% | +1% | +1% |
| Blank check company formed by dealmaker Dean Metropoulos and The Gores Group. | |||||
| Pivotal Acquisition (PVT.U) | $200M | $250M | 0% | +1% | +1% |
| Blank check company led by Jonathan Ledecky targeting the entertainment, logistics, and business tech industries. | |||||
| Andina Acquisition III (ANDAU) | $100M | $129M | 0% | +0% | +1% |
| Blank check company formed to acquire a business in Latin America. | |||||
| New Fortress Energy (NFE) | $280M | $2,339M | -22% | -7% | +0% |
| Fortress-backed owner of LNG liquefaction and regasification facilities. | |||||
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IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. As of 1/31/19, the Renaissance IPO Index was up 18.0% year-to-date, while the S&P 500 had a gain of 8.0%. Renaissance Capital's IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include VICI Properties (VICI) and Spotify (SPOT). The Renaissance International IPO Index was up 4.6% year-to-date, while the ACWX was up 7.6%. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include SoftBank and China Tower.
