Weekly Secondary Performance Review – 9/15/17

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This past week 22 secondary offerings came to market and IPO Boutique placed BUY ratings on 12 of them. In all, $7.2bn was raised by companies in the secondary market this week.

The average gain of IPO Boutique BUY rated offerings this week at first trade was 1.5%

The average gain of IPO Boutique Neutral rated offerings this week at first trade was 2.7%.

The last 20 IPO Boutique ‘BUY’ rated secondary offerings have produced an average gain of 2.40% at first trade and an average gain of 6.24% at the high of their first-day of trading.

It was another extremely active week for secondary offerings which included some outsized gains and others, especially block deals, with substantial push-back. Healthcare related offerings continue to outperform as T2 Biosciences (TTOO) and BioCryst Pharmaceuticals (BCRX) opened 8.0% and 2.8% higher, respectively. TTOO traded extremely well and closed its offering day session 13.0% above the offering price. IPO Boutique placed BUY ratings on both of these deals.

There were two very large offerings this week, First Data Corporation (FDC) and US Foods Holdings (USFD), which raised $1.5bn and $1.1bn, respectively. The FDC offering opened 0.7% higher and closed the session in the black while USFD struggled with a first trade $0.26 below the $17.50 offering price. USFD did not trade above the offering price on either Thursday (offering day) or Friday.

It should be noted that a pair of thinly-traded offerings from lower-tier underwriters substantially outperformed which ultimately skewed the ratings of the BUY vs Neutral at first trade. Marinus Pharmaceuticals (MRNS), underwritten by JMP Securities, and Curis Inc (CRIS), underwritten by Baird, opened 12.5% and 8.1% above their respective offering prices.

Block trades as a whole continue to struggle. Quintiles-IMS (Q), Cummins Inc (CMI), Tiffany & Co (TIF) and William Lyons Homes (WLI) were just a few of the blocks that came to market with  disappointing debuts.

There are currently no secondary offerings being marketed for the upcoming week.