There were nine IPOs in June marking the past 30-day stretch as the single busiest month of 2024 so far. However, the performance left a lot to be desired.
Five of the Nine IPOs opened below issue and seven of the nine are trading markedly below where they opened (respectively) as of the end of Tuesday’s (7/2) session. The three largest deals of June, Waystar Holdings ($967.5m), Tempus AI ($410m) and WEBTOON Entertainment ($315m) are each trading below issue price.
On the bright-side, Tempus AI (TEM) has begun to stabilize and buyers have stepped in. To note, a healthy IPO market brings strong pops at the open but also stable aftermarket activity. Tempus priced at $37, opened at $40 but traded as low as $22.89 in its seventh day as a public company. Four sessions later it was back to the issue price.
The underwriters had messaged in each of these deals that the transaction was multiple-times oversubscribed in the pre-IPO roadshow leading up to the debut. As referenced on Tuesday’s note, mispricing to a degree where there is an aftermarket shock is a major problem. I don’t think Tempus was mispriced like some of the biotech IPOs in 2024 had been. But in some cases (maybe this one), investors need to look in the mirror. When there are too many short-time-frame investors looking to ‘play-the-pop’ and get out, this is what the chart looks like. The IPO market will always have flippers — its the nature of the business. But with the current market backdrop and the quality of company coming to market at this time, those looking to speculate on short-term success have not been paid out.
What We’re Reading
Wall Street vs. Main Street: US private payrolls growth slows in June
Buyers Market: Manhattan is now a ‘buyer’s market’ as real estate prices fall and inventory rises
Future IPOs: Northern Data Weighs AI Unit IPO at Up to $16 Billion Value
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