The IPO market is cooking. Six IPOs raised $1 billion this past week, with five notching double-digit gains.
Beyond Meat (BYND) popped 163% in the biggest first-day pop since 2015. The vegan burger maker has had explosive growth (205% in the 1Q19), extremely rare for a food company, and likely appeals to a wide group of environmentally-conscious investors and ESG funds. With tech-like growth, it now has a tech-like valuation, at 15x trailing sales.
Coming in second, TransMedics Group (TMDX) finished the week with a 55% gain. While its device has not seen much traction yet, its organ transportation systems represent a notable improvement over existing coolers.
The two fast-growing Chinese tech companies also traded strongly. Plastic surgery site So-Young International (SY) was up 51%, offering strong growth, positive operating margins, and a wide-open market. E-commerce site Yunji (YJ) took a valuation cut and traded up 29%. It has also has demonstrated strong growth, though gross margins have been under pressure. After insider buying, the real float represents just 2% of the diluted market cap.
Only three companies submitted public filings this week, not unexpected given the timing of Memorial Day. The largest was PetSmart's large online pet supplies retailer Chewy (CHWY). Last valued at $47 billion by SoftBank, WeWork disclosed this week that it submitted a confidential filing for an IPO that could come later this year. Additionally, $100 billion-dollar unicorn investor SoftBank Vision Fund is reportedly exploring an IPO as well.
| 6 IPOs During the Week of April 29th, 2019 | |||||
|---|---|---|---|---|---|
| Issuer Business |
Deal Size |
Market Cap at IPO |
Price vs. Midpoint |
First Day Return |
Return at 05/03 |
| Beyond Meat (BYND) | $241M | $1,574M | 25% | +163% | +167% |
| Makes plant-based meat products for groceries and restaurants. | |||||
| TransMedics (TMDX) | $91M | $347M | 0% | +40% | +55% |
| Medical device company that provides a system for donor organ transport. | |||||
| So-Young International (SY) | $179M | $1,474M | 8% | +32% | +51% |
| Chinese online platform for searching and purchasing aesthetic surgery services. | |||||
| Yunji (YJ) | $121M | $2,504M | -8% | +29% | +29% |
| Chinese e-commerce site that uses a social platform to promote its products. | |||||
| Red River Bancshares (RRBI) | $27M | $326M | 2% | +12% | +12% |
| Louisiana commercial bank with 24 locations across the state. | |||||
| SciPlay (SCPL) | $352M | $2,085M | 7% | -5% | -5% |
| Scientific Games' social gaming unit offering casino-style mobile games. | |||||
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| 3 Filings During the Week of April 29th, 2019 | |||
|---|---|---|---|
| Issuer Business |
Deal Size |
Sector | Lead Underwriter |
| BioVie (BIVI) | $23M | Health Care | ThinkEquity |
| Early stage biotech developing therapies for cirrhosis. | |||
| Chewy (CHWY) | $800M | Technology | Allen & Co. |
| Online retailer owned by PetSmart selling assorted pet supplies. | |||
| Codiak BioSciences (CDAK) | $86M | Health Care | Jefferies |
| Early stage biotech developing exosome therapeutics for various diseases. | |||
IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. As of 5/2/19, the Renaissance IPO Index was up 34.0% year-to-date, while the S&P 500 had a gain of 17.1%. Renaissance Capital's IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include Elanco (ELAN) and VICI Properties (VICI). The Renaissance International IPO Index was up 14.4% year-to-date, while the ACWX was up 13.0%. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include SoftBank and Xiaomi.
