Weekly Secondary Performance Report (5.18.18)

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This past week 16 secondary offerings came to market in another light week and IPO Boutique placed BUY ratings on 6 of them. In all, $2.1bn was raised by companies…a much lighter figure than last week’s $5.3bn.

The average gain of IPO Boutique BUY rated offerings this week at first trade was 3.1%

The average gain of IPO Boutique Neutral rated offerings this week at first trade was -0.3%.

The last 20 IPO Boutique ‘BUY’ rated secondary offerings have produced an average gain of 3.2% at first trade and an average gain of 6.9% at the high of their first-day of trading.

The secondary market continued to have strong returns but was marred by the $1bn+ block offering that was ultimately postponed — IQVIA Holdings (IQV). The deal priced 10.0mm at $101.85 versus a last trade of $102.10. Similar to most Morgan Stanley blocks, the deal opened below issue price, in this case a $101.35 opening print. Around midday, the FDA released news calling into question some of IQVIA Holdings’ data which put immediate pressure on the stock causing an immediate halt. The company issued a statement in which they stood by their methodologies and even re-affirmed Q2 and full year guidance. As expected, lawyers became heavily involved. With these unique set of circumstances…there is the ability, providing it is done before settlement day, to “bust” all trades. Settlement day was Friday (5/18) and ultimately it was decided that this would be the course of action. Without this decision, there would inevitably have been a cavalcade of class action suits.

Marketed offerings continued to outperform as the six deals that had a multi-day book-build opened +3.7% at first trade on average. CURO Group Holdings (CURO), Primo Water Corp (PRMW) and Axon Enterprise Inc (AAXN) were the three best deals of the week and opened with 7.9%, 6.0% and 4.3% returns at first trades, respectively.

Another encouraging sign for the secondary market was that the offerings, as a whole, traded up during their initial sessions. The average price at first trade for the 16 offerings this week were 1.0% and the average close was 1.6%

There are currently zero secondary offerings on the schedule for next week.