The Nasdaq and the S&P 500 hit all-time highs and the Dow Jones topped 40,000 for the first time ever. And yet, Games Global withdrew its IPO this past week citing market conditions.
What gives?
First, the obvious answer: Companies often cite market conditions when there isn't enough demand for their deal at the price range.
Second, popular indices are often driven by mega-caps. The Renaissance IPO Index is the best benchmark for IPOs.
Third, it tells us institutional IPO buyers are still pushing back on valuation when a deal doesn’t excite. Traders are watching the IPO market for signs of heat (RDDT, ALAB, LOAR), but the big buyers need to show up first.
This week we reported that the IPO rebound lost steam in May, but we see an active June and July ahead based on filings and recent trading. As we’ve said before, the 2024 deal count will be a big increase from last year, but below the 10-year average.
Hot pot restaurant Super Hi International (Nasdaq: HDL) was the week’s notable deal, up +14.0% on its Nasdaq debut. Already listed in Hong Kong, this further bolsters the US as a global destination for IPOs. Three micro-caps also listed, with volatile initial trading, and Lionsgate Studios (Nasdaq: LION) completed its de-SPAC.
One sizable IPO is scheduled for the week ahead, insurer Bowhead Specialty (NYSE: BOW). Then the IPO calendar should remain quiet until after Memorial Day.
A few notable filings this week. Aluminum products firm Novelis (NYSE: NVL) filed to raise an estimated $1+ billion in a carve-out from its public Indian parent company. Mexican airline Aeromexico (NYSE: AERO) filed for a US IPO, following its Covid-era restructuring. Hospital billing software firm Waystar (Nasdaq: WAY) updated its filing ahead of an expected June launch.
The latest inflation data was “good enough” and the IPO market jumped +3.7% this week while the S&P 500 gained +1.5%. Project management platform monday..com was the winner up +25.9% while shoe brand On Holding was a close second, up +25.4%. Cross-border fintech dLocal sold off -27.7% after it reported a sharp decline in margins in Q1.
Take care,
Bill Smith
CEO and Founder
Renaissance Capital
|
Biggest price changes through
May 17th
in the
Renaissance IPO Index
|
||
|---|---|---|
| Top 5 | ||
| monday.com | MNDY | 25.9% |
| On Holding | ONON | 25.4% |
| Robinhood Markets | HOOD | 23.8% |
| Doximity | DOCS | 19.9% |
| Squarespace | SQSP | 14.7% |
| Bottom 5 | ||
| dLocal | DLO | -27.7% |
| Bausch + Lomb | BLCO | -4.9% |
| Duolingo | DUOL | -4.8% |
| AppLovin | APP | -4.6% |
| Paycor HCM | PYCR | -3.2% |
| Sectors | ||
| Consumer Discretionary | 7.1% | |
| Financials | 3.9% | |
| Industrials | 3.8% | |
| Technology | 3.4% | |
| Health Care | 2.5% | |
| Consumer Staples | -0.3% | |
Renaissance IPO ETF (NYSE symbol: IPO) tracks the Renaissance IPO Index
The Renaissance IPO Index returned 3.7% last week vs. 1.5% for the S&P 500.
