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This past week eight IPOs debuted, seven updated terms and, at the time of this writing, zero IPOs were filed.
The IPO market had a remarkable week as eight offerings came to market with an average gain of 25.8% at first trade. This included the first $2.0bn+ cash raise offering since Snap Inc. (SNAP) as PagSeguro Digital Ltd (PAGS) raised $2.26bn with its Wednesday (1/24) debut. PagSeguro priced $1.00 above range, $21.50, and opened 31.2% higher with a first trade of $28.20. The percentage gain at first trade was third highest among the 22 IPOs that raised more than $1bn cash since 2014. PAGS hit a first week high of $29.92 for a gain of 39.1% at top-tick.
The IPO market followed the hot biotech sector with the five deals in this sector giving investors returns of 34% on average. ARMO Biosciences Inc (ARMO) priced its offering $1.00 above range, $17.00, and opened 64.7% higher with a first trade of $28.00. The gains held steady in its opening trading session as the IPO traded at a strong premium throughout its debut day.
Menlo Therapeutics (MNLO) upsized its offering and priced $1.00 above its initial range. MNLO opened at $20.50 after pricing the offering at $17.00. This biotech offering traded extremely well in its opening sessions as the stock hit a first week high of $31.10 for a gain of 82.9% at its peak.
resTORbio Inc. (TORC) priced at the midpoint of the range, $15.00, and opened at $18.62 for a gain of 24.1%. TORC settled into the mid 17s on its opening day after hitting a high of $20.50 in the minutes after opening on the Nasdaq.
The week’s most challenging deal was Solid BioSciences LLC (SLDB). After initially being the ‘hottest’ biotech of the week going into pricing, the company had to delay pricing to make a pertinent disclosure with the SEC. This, in turn, allowed the buy-side to push for a more favorable pricing. After initially eyeing an $18.00-$19.00 pricing…the deal upsized to 7.8mm shares and priced at $16.00. The drama did not stop Solid BioSciences success as the offering opened with a first trade of $25.50 for a gain of 59.4%. SLDB hit a high of $29.25 before selling off to as low as $22.00 in a highly-volatile opening day.
One biotech, Eyenovia (EYEN) had an uninspiring debut. EYEN priced 2.73mm shares at the low-end of the range, $10.00 and opened flat. Eyenovia did break its offering price but ultimately held steady around $10.00 in its opening week.
One of the two sponsor backed deals enjoyed success in their opening week. PlayAGS Inc (AGS) priced at the low-end of its range, $16.00, and opened $1.00 higher for a 6.4% gain. The Apollo Global backed offering bucked the performance of last week’s disastrous ADT offering underwritten by the same sponsor. AGS traded well in its opening session as the offering hovered in the mid 18’s in its opening session.
The other sponsor backed IPO, Gates Industrial Corporation (GTES), did not receive the same reception. GTES opened just $0.05 above its $19.00 offering price and broke lower in its opening session.
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