US IPO Weekly Winners & Losers

We don’t quite have the wind at our back yet, but at least it’s no longer in our face.

The IPO market scored a major win as semiconductor giant Arm Holdings (Nasdaq: ARM) raised $5 billion in the biggest tech listing in 4 years. Arm priced at the high end and popped +25% on day one. At these levels the valuation looks full on just about every metric, which means that public investors gave Arm credit for an ambitious expansion into AI. That’s relevant for the rest of the tech pipeline, even if Arm is a unique IPO with few comparisons.

Even more important is what’s coming up next week.

Grocery platform Instacart (Nasdaq: CART) and marketing software seller Klaviyo (NYSE: KVYO) will be the first US tech unicorns to go public since 2021. Klaviyo is an especially important deal to watch, since the IPO pipeline contains dozens of enterprise software plays. In a sign of high demand, Instacart raised its range ahead of a rare Monday night pricing, with Klaviyo teed up a day later.

Despite the building enthusiasm around tech IPOs, it’s worth noting that both deals are expected to have IPO down-rounds. Both tech unicorns have 5 other things in common, writing a playbook that future tech deals will likely follow in the near-term. They have:

(1) Strong growth. (2) Positive cash flow. (3) Discounted valuations relative to peers. (4) Smaller share floats. (5) Cornerstone investors.

To summarize: This is the surest sign yet that the US IPO market is finally coming out of a once-in-a-decade downturn.

Big filing news this week, as Birkenstock (NYSE: BIRK) joined the public pipeline. The 250-year-old German sandal maker’s prospectus has some interesting claims, saying that trends such as “the breakthrough of modern feminism… have converged around BIRKENSTOCK.” Elsewhere in the pipeline, car sharing platform Turo (NYSE: TURO) and natural gas producer BKV Corp (NYSE: BKV) updated financials, signaling imminent launches.

The broader IPO market mostly treaded water this week, down -0.4% vs. the S&P 500’s -0.2%. Our IPO Pro market indicator has now been at Neutral for a little over a month. Casino app developer Playtika led the winners this week up +11.3%, while web development tool DigitalOcean fell -9.4%.