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Volatility looks like the one constant of this year's IPO market.
The US IPO Index contracted -5.8% this week, nearly wiping out the prior week’s gains, vs. -3.4% for the S&P 500. Tech and fintech dragged down the IPO index, with app monetization platform AppLovin off -27.5% amid an analyst downgrade. Battered Chinese fintech Lufax led the winners gaining +17.3%, alongside US coding platform GitLab up +12.4%.
This coming week we’ll release our must-read 2022 IPO Annual Reviews.
Our analysts and I agreed that 2022 is looking like a “reset year.” Interest rates once again reflect a reasonable cost of capital. Issuers no longer expect crazy-high valuations or lock-up exemptions. Investors aren’t so quick to value companies at >20x sales, and profits matter.
There’s one more major reset on the horizon. The next earnings season will give public companies a chance to correct overly optimistic financial forecasts.
One small IPO priced this week: Lab-grown diamond firm Adamas One (Nasdaq: JEWL) raised $11 million and traded up +5%. A few other micro-caps are on the calendar, shifting around due to market conditions and extra Nasdaq scrutiny.
Vietnam’s leading electric vehicle maker VinFast (Nasdaq: VFS) submitted its F-1, the biggest US IPO filing months. We expect it can raise at least $1 billion, likely in January.
This week the largest pending SPAC merger fell apart. Digital currency firm Circle, which is behind the USDC stablecoin, terminated its $9 billion SPAC merger with CND. On the other hand, a whopping nine SPACs announced new mergers. The largest was X-Energy, a developer of small modular nuclear reactors merging with AAC, valued at $2.2 billion.
Thanks to the recent China rally, our International IPO Index has strongly outperformed over the past month. Stay in the know with our International IPO Winners & Losers newsletter.
Take care,
Bill Smith
Co-Founder and CEO
Renaissance Capital
Biggest price changes through
Dec 9th
in the
Renaissance IPO Index
|
||
---|---|---|
Top 5 | ||
Lufax Holding | LU | 17.3% |
GitLab | GTLB | 12.4% |
Academy Sports and Outdoors | ASO | 9.1% |
HashiCorp | HCP | 7.9% |
Legend Biotech | LEGN | 5.2% |
Bottom 5 | ||
AppLovin | APP | -27.5% |
Affirm Holdings | AFRM | -22.4% |
Unity Software | U | -17.1% |
Coinbase Global | COIN | -15.6% |
Peloton Interactive | PTON | -13.5% |
Sectors | ||
Health Care | -2.6% | |
Consumer Staples | -3.4% | |
Technology | -3.5% | |
Industrials | -4.0% | |
Consumer Discretionary | -7.1% | |
Financials | -9.5% | |
Real Estate | -12.6% |
Renaissance IPO ETF (NYSE symbol: IPO) tracks the Renaissance IPO Index
The Renaissance IPO Index returned -5.8% last week vs. -3.4% for the S&P 500.