US IPO Weekly Winners & Losers

Like many others this week, we dug through our work emails from the last government shutdown in 2018-2019.

Here's what to expect from this one:

Without SEC approvals, the shutdown should freeze the US IPO market. That means the anticipated Birkenstock (NYSE: BIRK) IPO is likely off the table for now, although some stories suggest it will try it's luck even during a shutdown. The online EDGAR filing system will stay open, so we'll probably still see some initial and amended filings.

If the shutdown lasts a week or two, that'll simply shift back IPO timeframes. If it stretches on beyond that, it could really upend the fall IPO market, since November and December have narrower listing windows. Remember that the SEC isn't giving feedback to filers, so a 30+ day shutdown would gum up the works of deals targeting IPOs later in the quarter.

In 2019, after 30 days of inactivity certain IPO candidates explored an alternate method of going public through a rarely-used rule. The SEC's skeleton crew also started looking at approving at least 1 IPO. However Congress then passed a funding bill, and IPOs started up again.

This is all subject to change, and everyone seems to be playing it by ear. So far, shutdowns haven't had long-lasting consequences for new listings. In the meantime, experienced investors know the IPO market is more than just upcoming offerings, and will no doubt re-examine listings from the past year or two.

The IPO market bounced back from the prior week, as the Renaissance IPO Index gained +3.7%, vs. a -0.7% loss for the S&P 500. EV developer Rivian Automotive was the top performer, up +17.9%, with auto rental service Hertz in last.

We counted four small IPOs this week, none of which traded well. China-focused biotech Adlai Nortye (Nasdaq: ANL) raised $58 million, though $50 million was taken down by an unnamed investor. The other three targeted real estate in Japan (LRE), marketing services in China (VSME), and e-sports in Pakistan (GPAK). A fifth deal (SYRA) listed on the Nasdaq but didn't meet our market cap cutoff.

This week we released our Q3 Review of the US IPO market. As I always say: required reading for anyone in the IPO space.