IPO Summary: Karman Achieves Escape Velocity, SailPoint Hits Rough Waters

It was a week full of surprises — both good and bad.

Space and Defense pure-play IPO Karman Holdings, backed by private equity company Trive Capital, priced 23.0mm shares (upsized from 21.05mm) at $22.00 ($2 Above Range) and opened at $30.00 for a 36.3% gain at first trade. Karman traded in a relatively tight-range in its opening session. The stock sold down to a low of $28.02 in the first 20-minutes of trading before getting its footing and trending higher int he second half of its debut day. The stock hit a first-day high of and closed at $30.05 — not far from its opening print price.

According to our sources, the deal finished roughly 17-times oversubscribed with the top ten percent of the deal receiving 50% of the offerings and top 25% of the transaction receiving 75% of the allocations. The roadshow was highly successful and rumors from our sources have stated that nearly every 1-on-1 meeting that Karman took turned into an order. IPO Boutique messaged to clients that this IPO ‘could’ trade like a ‘4’ rated deal and indeed that prediction came to fruition. Karman closed the week at its highs with a $32.00 final print on Friday.

The first software IPO of 2025 fell flat on its face.

Sailpoint Technologies Holdings (SAIL US) priced 60.0mm shares (upsized from 50.0mm) at $23.00 (high-end of the upwardly-revised range) and opened flat –$23.00. The stock traded below the issue price for the majority of its first trading session and hit a low of $20.77 before rebounding to a $22.00 print at the close. The stock traded much more favorably in its second session tapping a top-print of  $24.83 to reward investors who stuck with the identity-management software in day two.

Our sources stated that the deal finished 20-times oversubscribed with the top 20-percent of accounts getting 75% of the deal. The transaction saw its filing range previously upwardly-revised from $19-$21 signifying strength in the deal. From a “color” perspective, this deal had all the makings of being a “blow-out” IPO.

So how did a deal that everyone desired ultimately finish its opening day below issue?

While there’s plenty of blame to go around, the brunt of it should be placed on the underwriting lineup. It is an egregious mistake to see an upsized deal open flat. However, when this error was compounded from the actions earlier in the week of a range increase it truly makes you “scratch your head in disbelief”.

The most important job of an underwriter is to allocate in a way that maintains an aftermarket appetite. This exercise failed on the part of the lead underwriters.

SailPoint did close the week at $24.55 for a gain of 6.7% versus issue price.

Mortgage lender Northpointe Bancshares, Inc. (NPB) priced 10.4mm shares at $14.50 (below the $16-$18 range) and opened at $14.60. IPO Boutique elected to downgrade the stock to a ‘2’ rating during the week based upon the weaker channel checks.

Aardvark Therapeutics (AARD US) IPO was a major disappointment.

The company with a goal to become a leader in the treatment of obesity and obesity-related conditions, starting with rare hyperphagias, priced a full size deal of 5.88mm shares at the low end of the prevailing range, $16.00, and opened at $15.18 for a loss of 5.1% at first trade.

The stock was met with further selling pressure out of the gate and hit a low of $11.55 or 27.8% below issue. The stock rebounded to finish its opening session at $14.31.