US IPO Weekly Winners & Losers

Summer's in full swing, and the IPO market brought flip-flops.

The US IPO index has alternated between a gain or loss of at least 7% in each of the past 4 weeks. This week IPOs backtracked -7.1%, compared to -0.9% for the S&P 500, as US inflation came in hotter than expected to a new 40-year high.

Had the feeling of déjà vu from five weeks ago, when I wrote: "Inflation is the dominant economic story of 2022. And it won’t let investors forget it."

Despite the volatility, three Chinese companies listed in the US this week. The largest, fintech AMTD Digital (NYSE: HKD), raised $125 million and popped +108% but with very low trading volume. The other two fell at least -30%. We don’t see US investors clamoring for Chinese IPOs, it’s more likely these are “bought deals” and mostly marketed in China.

The WSJ reported that mega-unicorn Stripe cut its internal value to $74 billion. 2022’s biggest IPO candidates – Stripe, Klarna, and Instacart – have each lopped $15+ billion off their valuations. Regardless of whether it makes the news, unicorns of all stripes are worth far less than their last round.

In addition to mark-downs, we expect unicorn M&A will become a major theme of 2022-2023 private markets.

The week’s IPO Index winner was personal care brand Olaplex with a +9.6% gain, helped by strong US consumer spending. Software stocks slid on fears of lower tech budgets, though the week’s worst performer was cell analysis company 10x Genomics, down -30.6% after it missed sales forecasts.

Keep an eye out for our market commentary. This week we published pieces on Polestar’s trading, Bill Ackman’s next act, and the top IPO law firms of Q2.