In the busiest week for the IPO market since February, three upsized IPOs and three SPACs entered the public market. Kingsoft Cloud (KC) led the way, completing the largest IPO since GFL Environmental's (GFL) billion-dollar deal in early March. The IPO Index's nearly 11% gain this past week indicates that the IPO market is continuing to recover.
Kingsoft Cloud (KC), Kingsoft's spin-off of its cloud services and infrastructure division, upsized its ADS offering and priced at the midpoint to raise $510 million at a $3.5 billion market cap. The unprofitable company has ample opportunity in China's large and underpenetrated cloud market, but it faces steep competition from much larger players. Kingsoft Cloud finished up 40%.
London-based GAN (GAN), which provides internet gambling software, priced its upsized deal at the high end to raise $54 million at a $254 million market cap. GAN's IPO comes hot on the heels of larger sports betting platform and recent SPAC acquisition DraftKings (DKNG), which is currently up 35% from its late April listing date. After popping 56% on its first day, GAN finished the week up 70%.
Oncology biotech Ayala Pharmaceuticals (AYLA) priced its slightly upsized deal at the midpoint to raise $55 million at a $194 million market cap. The biotech's lead candidate, AL101, is in an ongoing Phase 2 trial for recurrent or metastatic adenoid cystic carcinoma in patients with Notch pathway mutations, and interim data shows a 69% disease control rate and manageable tolerance. Ayala finished flat on its first day.
Three SPACs went public this past week. Roth CH Acquisition (ROCHU), Roth Capital and Craig-Hallum's SPAC, raised $75 million to acquire a business services, consumer, healthcare, technology, or wellness company. Sustainable Opportunity Acquisition (SOACU) raised $300 million to acquire a sustainable business. Live Oak Acquisition (LOAKU) raised $200 million. The company is led by former FBR CEO Richard Hendrix and former Nuveen CEO John Amboian as CEO and Chairman, respectively. All three SPACs traded below their $10 issue price and SPAC GigCapital3 (GIK.U) delayed its offering.
| 6 IPOs During the Week of May 4th, 2020 | |||||
|---|---|---|---|---|---|
| Issuer Business |
Deal Size |
Market Cap at IPO |
Price vs. Midpoint |
First Day Return |
Return at 05/08 |
| GAN (GAN) | $54M | $254M | 13% | +56% | +70% |
| UK-based provider of internet gambling software. | |||||
| Kingsoft Cloud (KC) | $510M | $3,489M | 0% | +40% | +40% |
| Chinese cloud services and infrastructure provider being spun out of Kingsoft. | |||||
| Ayala Pharmaceuticals (AYLA) | $55M | $194M | 0% | +0% | +0% |
| Phase 2 biotech developing in-licensed Notch inhibitors for aggressive cancers. | |||||
| Sustainable Opp. Acq. (SOACU) | $300M | $375M | 0% | n/a | -1% |
| Blank check company targeting an environmentally sustainable industrial business. | |||||
| Roth CH Acquisition (ROCHU) | $75M | $96M | 0% | -1% | -1% |
| Blank check company formed by executives at Roth Capital and Craig-Hallum. | |||||
| Live Oak Acquisition (LOAKU) | $200M | $250M | 0% | n/a | -1% |
| Blank check company formed by merchant bank Live Oak and led by the former CEOs of FBR and Nuveen. | |||||
Sign up for a free trial of our premium platform, IPO Pro. Follow us on Twitter (@IPOtweet) and register for our updates on the IPO market.
Chinese mobile data sharing marketplace uCloudlink (UCL) filed to raise $50 million. The Hong Kong-based company allows users to access multiple mobile allowances from different network operators as opposed to just using one.
Bill Foley's SPAC Foley Trasimene Acquisition (WPF.U) filed to raise $750 million and intends to target a business in the financial technology or business process outsourcing industry.
| 2 Filings During the Week of May 4th, 2020 | |||
|---|---|---|---|
| Issuer Business |
Deal Size |
Sector | Lead Underwriter |
| Foley Trasimene Acq. (WPF.U) | $750M | SPAC | Credit Suisse |
| Blank check company formed by financial services veteran Bill Foley. | |||
| uCloudlink (UCL) | $50M | Communication Services | I-Bankers |
| Mobile data traffic sharing marketplace in China. | |||
Sign up for a free trial of our premium platform, IPO Pro. Follow us on Twitter (@IPOtweet) and register for our updates on the IPO market.
In other news, medical device maker Pulmonx (LUNG) withdrew its $86 million IPO, opting instead to raise funds privately.
IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. As of 5/7/20, the Renaissance IPO Index was up 4.5% year-to-date, while the S&P 500 was down 10.8%. Renaissance Capital's IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include Uber (UBER) and DocuSign (DOCU). The Renaissance International IPO Index was down 2.1% year-to-date, while the ACWX was down 19.5%. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include Adyen and Meituan-Dianping.
