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After a well-documented slow 2016…forecasters had predicted an active syndicate calendar in 2017. One analyst said 275 deals this year was possible…others were saying the pipeline was considerably backed up.
The availability of private funding and lack of urgency to go public continue to be logical reasoning behind why 2017 is behind the “aggressive pace” predicted. But we would like to offer our two cents as there were considerable positives to take from what we consider a ‘robust syndicate calendar’ from March to May.
The three month stretch between March and May brought a total of 45 IPOs raising $12.54bn. The year’s largest deal (and most hyped one year-to-date), Snap Inc (NYSE: SNAP), kicked things off with a 41% gain at first trade on March 2nd and paved the way for other technology deals. Nine of 45 offerings in the last 90 days have been tech deals with an average of 20.9% return at first trade from those offerings.
The energy sector showed its willingness (or possibly desperation) to come to market as four of the eight deals in the sector priced below the original range. Among these four where the ‘buy-side’ showed control…all four opened positive and the average gain at first trade was 5.4%.
The healthcare sector, while not having as much inventory as past years, has seen its recent new issues trade well in the after market. The financial IPOs of 2017 have been satisfactory. So, the question now…what is going to spark the next round of offerings to come to market?
We think ‘time’.
The week prior and after Memorial Day is a cyclical dead period for the IPO market. Once equity capital market bankers return then its time to get the house in order. We expect filings and launches of new deals to ‘heat up’ next week to pave the way for a strong June, July and August. But then, some say, that’s just the beginning.
Richard Kline…who is a partner at Goodwin Procter, a company that has worked on a few recent IPOs, told TechCrunch that “September, October is when you should look for the biggest bump in IPO activity.”
Furthermore…the TechCrunch article quotes a Nasdaq listing official to say the next round of deals are on the way.
Bob McCooey, senior vice president of Nasdaq’s Listing Services, is also expecting the fall to be a great time. “This post-Labor Day to Thanksgiving window could be one of the busiest that I’ve seen in the decade that I’ve been here.” He said he’s been getting a “significant amount of inbound phone calls.”
According to Reuters, e-commerce company Stitch Fix have hired investment banks for a potential IPO. There’s always rumors about tech unicorns including one from Zacks about AirBnb. Other companies that could be nearing an IPO include Athenex, Frontier Group, Nine Energy Services, Oasis Midstream Partners, Ranger Energy Services and Altice USA. And when this slew of deals do come to market…consider IPO Boutique to be on your team to provide research, daily color and a forecast on the outlook of the offerings deals with more than four decades of experience. We know which offerings the ‘large money’ is going into. Why not have that information at your finger tips?
Indicate for the best and forget the rest.
But in the meantime, if you are waiting for the IPO gates to ‘open up’…there have been an ample number of follow-on offerings to come to market. We provide rating recommendations, instant re-offer ranges and real-time pricing through our Secondary Alerts subscription.
IPOBoutique.Com provides comprehensive research, ratings and daily advisories on new issues hitting the IPO market. To subscribe to IPOBoutique’s service: click here.
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