US IPO Weekly Winners & Losers

Investors hoping the Fed would throw a life preserver instead received a cinderblock.

The US central bank raised rates a sharp 75 bps, with plans to keep rates higher for longer. There’s been less talk of “soft landings” and best-case scenarios, and more talk of “stagflation” and worst-case scenarios. The US IPO market fell -7.9% this week, compared to -5.6% for the Nasdaq and -3.3% for the S&P 500.

Despite its beat-and-raise, sales platform ZoomInfo was the week’s IPO loser, off -35.2% due to a weaker outlook for 2023. It’s worth remembering that many US tech startups live in an interconnected ecosystem of VC funding, ad dollars, and software spend. Battered Chinese IPOs led the winners amid rumors of a reopening in China, and last week’s loser Kanzhun took the top spot gaining +30.4%.

On a positive note, about 80% of the year’s large IPOs are above issue, with strong trading from biotechs. Oncology biotech Acrivon Therapeutics (Nasdaq: ACRV) joined the IPO calendar, planning to raise $100 million in the coming week in a deal led by Morgan Stanley.

SPACs are racing to complete deals. Six companies announced SPAC mergers this week, including two valued at around $1 billion, an offshore oil E&P (FLME) and an ammo maker (BREZ). Another five SPACs are voting on proposed mergers this coming week, with three valued at $1+ billion.