Weekly Secondary Performance Report (4.20.18)

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This past week 12 secondary offerings came to market in another light week and IPO Boutique placed BUY ratings on 6 of them. In all, $1.25bn 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 2.7%

The average gain of IPO Boutique Neutral rated offerings this week at first trade was -1.8%.

The last 20 IPO Boutique ‘BUY’ rated secondary offerings have produced an average gain of 2.4% at first trade and an average gain of 5.7% at the high of their first-day of trading.

It was a light week in terms of quantity and cash raised by the equity capital markets via secondary offerings…which can be most likely attributed to the beginning of earnings season. The largest cash raise was a $325m cash raise from South Jersey Industries (SJI) underwritten by BofA Merrill Lynch, Guggenheim Securities & Wells Fargo. We played the offering conservatively, rating it Neutral, but the deal did not surprise us with a 2.5% return at first trade. SJI closed the offering day session +1.2% vs. the offering price.

The best deals this week were biotech offerings as Bellicum Pharmaceuticals (BLCM) and Rigel Pharmaceuticals (RIGL) opened with gains of 6.5% and 5.1% at first trade. We did want to point out the “fast money” that were in a lot of these deals — this was evidenced by the average closing trade vs. the average opening price…especially with IPO Boutique BUY rated deals. The six BUY rated offerings opened +2.7% but closed -1.2%.

There is currently one secondary offerings on the schedule for next week, Valeritas Holding (VLRX).