US IPO Weekly Winners & Losers

It’s big news when a billion-dollar IPO pops +36.5%. Was it a hot tech unicorn? A fast-growing consumer brand?

Nope: a provider of maintenance services for aircraft engines, backed by Carlyle.

StandardAero (NYSE: SARO) raised $1.4 billion, making it the year’s third-largest IPO. It priced at a discount to public comps, and had the biggest pop for a billion-dollar deal since March 2021. Aircraft fleets are aging, which means StandardAero is in the sweet spot of the repair cycle. Its combination of attractive growth, profitability, and valuation made for a strong debut.

Seven companies IPO’d on major exchanges this week. Retail REIT FrontView REIT (NYSE: FVR) was the week’s other sizable deal, and it initially broke issue but closed up +1.3%. Chinese courier service BingEx (Nasdaq: FLX) raised $66 million and gained +9.2%, notable for being only the year’s second Chinese issuer worth $1 billion at its US listing.

Two major – but very different – tech IPO filings hit this week, both on schedule to list late-October.

• The emerging AI era has left people wondering when the IPO market will see more pure-play AI companies, and Cerebras Systems (Nasdaq: CBRS) is just that. The company says its large-format wafers were built with AI compute in mind, and pits its products against Nvidia GPUs. Cerebras boasts an eye-popping 1,474% sales growth in the first half, though there are a few caveats (customer concentration, lower q/q growth). Valuation estimates range as high as $8 billion, or nearly 40x LTM sales. Other chip IPOs with an AI angle (ARM, ALAB) have done well.

• LBO’d IT distributor Ingram Micro (NYSE: INGM) filed for an estimated $1+ billion IPO, and could be worth $10 billion. Owned by Platinum Equity, it generates $48 billion in sales distributing tech products. It’s a low-growth, low-margin business, but it aims to pay a dividend. Our research director reminded me that I wrote our pre-IPO report on Ingram the first time it went public in 1996.

We also had sizable filings from a biotech (SEPN) and an energy producer (INR).

Stocks slid at the start of the week but strong jobs numbers lifted markets on Friday. The IPO market ended the week off -1.6%, while the S&P 500 eked out a +0.2% gain. The auto industry appeared among both IPO winners and losers this week: Chinese EV brand ZEEKR soared +22.9%, while US EV maker Rivian and assisted-driving play Mobileye brought up the rear, both off about -10%.