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For the umpteenth time, the US Fed poured cold water on equity markets on Friday. High inflation and a hawkish Fed can keep the IPO market closed indefinitely.
In any case, we do expect some activity in the coming months. A number of IPOs have refreshed their filings, and this week biotech Third Harmonic Bio (Nasdaq: THRD) submitted the largest new filing in three months. We’ll discuss our outlook in more detail this week in our annual Fall Preview report.
Three micro-caps (JZ, PXMD, STBX) and three nano-caps (MOB, JFBR, ONFO) priced IPOs this week. A Chinese education firm (JZ) was the latest low-float pop-and-drop, at one point up +3,140%. From there it fell -88%. Micro-caps now make up about two-thirds of US IPOs this year, up from ~20% in recent years.
For IPO Pro subscribers, we published a write-up on coffee distributor Westrock Coffee (Nasdaq: WEST), which goes public via SPAC merger on Monday. A sign of a more mature SPAC market, it has a large PIPE, over $700 million in revenue, and positive EBITDA.
Another sign of a mature SPAC cycle: IR services heavyweight ICR launched a new SPAC liquidation service. We’ve noted a recent uptick in SPAC liquidations, with the majority expected in 2023.
The Renaissance IPO Index returned -0.8% this week, outperforming the S&P 500’s -4.0% loss. Snowflake shot up +28.4% after a strong revenue beat, now valued at an impressive 35x trailing sales. Buy-now-pay-later firm Affirm fell -20.5% after its earnings release, where losses were wider than expected amid macro headwinds.
US-listed Chinese issuers made up three of the top five winners this week, as regulators in both countries reached a deal to allow Chinese stocks to remain listed in the US. This could open the door to more US IPOs from China, eventually.
Take care,
Bill Smith
Co-Founder and CEO
Renaissance Capital
Biggest price changes through
Aug 26th
in the
Renaissance IPO Index
|
||
---|---|---|
Top 5 | ||
Snowflake | SNOW | 28.4% |
Full Truck Alliance | YMM | 23.1% |
KE Holdings | BEKE | 18.3% |
Kanzhun | BZ | 15.1% |
Oak Street Health | OSH | 13.4% |
Bottom 5 | ||
Affirm Holdings | AFRM | -20.5% |
ZIM Integrated Shipping Services | ZIM | -16.4% |
Xpeng | XPEV | -10.9% |
Asana | ASAN | -10.1% |
Coinbase Global | COIN | -9.9% |
Sectors | ||
Real Estate | 18.3% | |
Technology | -1.0% | |
Health Care | -1.5% | |
Financials | -3.7% | |
Consumer Staples | -3.9% | |
Industrials | -5.7% | |
Consumer Discretionary | -6.3% |
Renaissance IPO ETF (NYSE symbol: IPO) tracks the Renaissance IPO Index
The Renaissance IPO Index returned -0.8% last week vs. -4.0% for the S&P 500.