After a challenging several months, the Renaissance IPO Index gained 7.8% on Monday, capping off a tumultuous January with its best performing day since March 2020.
The Renaissance IPO Index (IPOUSA) is a basket of the largest and most liquid IPOs over the past three years tracked by the IPO ETF (NYSE: IPO). It currently contains 107 constituents that span eight sectors, and more than 80% have market caps of $10 billion or greater.
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Despite the rally, the Index finished the month with a -19.7% loss, the worst January in its 13-year history, and the worst month since March 2020. The Nasdaq Composite and S&P 500 also had their worst months since March 2020.
The Index’s performance on Monday was fueled by nearly all of its constituents; all but one posted a gain for the day. Top performers included various growth companies, notably the tech and fintech industries, as well as several battered Chinese names.
The day’s biggest gainers included Chinese delivery platform Dada Nexus (DADA; #102 holding) up 19% for the day; Chinese real estate site KE Holdings (BEKE; #37) up 15%; electric truck developer and the largest IPO of 2021 Rivian (RIVN; #29) up 15%; web performance platform Cloudflare (NYSE: NET; #8) up 15%; and retail brokerage Robinhood (HOOD; #26) up 11%.
It’s too early to say whether Monday’s trading indicates the start of a sustained rebound or the type of wild gyrations typical of a bear market.
Companies are already lining up for when the IPO market reopens, though unlike last year, cash flow and profitability are once again key. Eyecare giant Bausch + Lomb (BLCO) is the largest IPO on file, estimated to raise up to $3 billion in its debut, followed by Greek yogurt brand Chobani (CHO) and Indian IT services provider Coforge (COFO), both of which are expected to be billion-dollar deals.
| IPO Index Top Holdings | ||||
|---|---|---|---|---|
| Rank | Company | Business | Index Weight | 2022 Return |
| 1. | Uber Technologies (UBER) | Ridesharing and delivery | 7.97% | -10.8% |
| 2. | Snowflake (SNOW) | Data warehousing software | 7.07% | -18.6% |
| 3. | Datadog (DDOG) | IT analytics | 4.78% | -18.0% |
| 4. | CrowdStrike Holdings (CRWD) | Security software | 4.66% | -11.8% |
| 5. | Zoom Video (ZM) | Video and web conferencing | 4.39% | -16.1% |
| 6. | Airbnb (ABNB) | Short-term rental network | 3.28% | -7.5% |
| 7. | Avantor (AVTR) | Lab supplies and services | 3.06% | -11.4% |
| 8. | Cloudflare (NET) | Website optimization | 3.05% | -26.7% |
| 9. | Palantir Technologies (PLTR) | Data analytics | 2.96% | -24.7% |
| 10. | Coinbase Global (COIN) | Crypto exchange | 2.86% | -24.7% |
| IPO Index | -19.7% | |||
| S&P 500 | -5.3% | |||
| Nasdaq Composite | -9.9% | |||
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