IPO Boutique Brief: Five Launches, Analyst Initiations and “Looking back at the Losers”

This is an IPO Boutique Brief discussing the day’s syndicate news, information and events.

Interested in having pre-IPO color, commentary and ratings? Here’s a sample of the information we provide.

FIVE IPO LAUNCHES:

It was highly anticipated that IPOs would “launch” this morning and begin a roadshow and four five companies did just that. The largest being Medallia Inc (MDLA), a enterprise software, experience management company, who will be looking to raise up to $261m with a valuation in the $1.95bn-$2.2bn area based on the $16-$18 range. 

The other four companies to set terms were Phreesia, Inc., Fulcrum Therapeutics, Inc. and Mirum Pharmaceuticals., and Owl Rock Capital Corporation.

It is possible that additional companies launch their IPOs to fill the IPO calendar for the Week of July 15th.

BULLS ON CROWDSTRIKE

CrowdStrike Holdings (CRWD) was one of three recent IPOs to receive analyst  initiations this morning (Mohawk Group and Fiverr International were the others). CrowdStrike’s 86.8% gain at first trade was the second largest premium at the opening print of the 2019 year for IPOs (Adaptive Biotechnologies opened +95.1% & Beyond Meat comes in third at 84.0%). With the stock trading at more than double the $34.00 issue price, the analysts calls were expected to be bullish and they did not disappoint. Here were a few of the calls:

• JP Morgan, $100
• Oppenheimer, $90
• Stifel & Mizuho, $80
• BofA Merrill Lynch, $75
• RBC, Credit Suisse, $70
• SunTrust Robinson Humphrey, $69

VIA CNBC.Com — BofA Merrill Lynch and its analyst placed this note on CRWD

“CrowdStrike is positioned well to disrupt the $7bn endpoint security market and expand from core detection and response capabilities to adjacent areas such as IT hygiene, vulnerability management, and more. ”

Tuesday’s notable analyst initiation: Chewy Inc (CHWY).

TREES ALL DON’T GROW TO THE SKY

The 2nd Quarter was an incredible quarter for IPOs. Read our entire 2Q 2019 review right here. But the gist of it… 60 IPOs debuted to an average of 22.8% above its issue price. Those same 60 IPOs are now 34.8% above their issue price (on average).

But that doesn’t mean its a green light to blindly by IPOs. After all, Beyond Meat heavily skews this as its currently +525% versus its issue price.

One stat that should have you reconsider. A total of 21 of the 60 IPOs are trading below their initial offering price.

The five worst IPOs YTD: 

1. Ruhnn Holdings (RUHN), -72%
2. Axcella Health (AXLA), -55%
3. GreenLane Holdings (GNLN), -53%
4. HOOKIPA Pharma (HOOK), -51%
5. Bicycle Therapeutics (BCYC) – 35%
   

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