The US IPO market was mixed this week with four successful pricings and an unusually high number of companies withdrawing plans to go public.
Chinese ADRs continued to be well-received by US investors with Sequoia-backed private wealth management company Noah Holdings (NOAH) and Warburg Pincus-backed chip company RDA Microelectronics ending the week up 38% and 10%, respectively, from their listing prices. Despite its small size and short track record, Noah Holdings managed to generate interest on its rapid growth and leading share in China's nascent private wealth management industry. RDA Micro, which targets China's expanding handset market, also performed well with similarly strong growth rates and its large customer base.
Inphi Corporation (IPHI), the second chip company to approach the public markets this week, raised $82 million in its IPO and saw its stock climb 30% by the end of the week. The fabless provider of high-speed analog semiconductor solutions has grown its top line and expanded margins over the past several years and sells over 170 products.
Complete Genomics (GNOM) was the worst performer of the group and traded off 18% by Friday's market close. The company, which offers outsourced DNA sequencing services, priced its 6 million share IPO at $9, 31% below the midpoint of the original $12-$14 range. Complete Genomics is still unprofitable and has burned through $53 million in cash over the last twelve months, which likely contributed to lackluster deal demand.
Though three out of this week's four IPOs posted double-digit returns, the market also saw three companies delay their deals (Lizhan Environmental (LZEN); Wave2Wave Communications (WAV); Richmond Honan Medical Properties (MOB)), as well as a wave of withdrawals (US Federal Properties Trust (USFP); Rules-Based Medicine (RULE); Ikaria (IKAR), Goodman Global Group (GGL); Everyday Health (EVDY)). Ikaria, a biotherapeutics company that markets the only FDA-approved treatment for hypoxic respiratory failure in infants, had expected to raise $160 million this week before slashing the deal size by 38% and then postponing the IPO.
However, the recent high levels of IPO activity show no signs of slowing with ten deals scheduled on the US IPO calendar for next week. The diverse group includes high-profile deals such as Caesars Entertainment (CZR), the world's largest casino entertainment provider, consulting company Booz Allen Hamilton (BAH) and General Motors (GM), which expects to raise $10 billion in its IPO and rank among the top five biggest IPOs in US history.
