IPOBoutique Brief 3.26.2105 – Volatile Market Rattles Syndicate Market

Wednesday was an ugly day on Wall Street.

The Dow tumbled 291 points (-1.62%)…which seemed like a hill of beans compared to the Nasdaq’s 118 point (-2.37%) tumble. What’s concerning to the IPO and secondary market is the sector of stock being hit–technology and biotech company’s.

On Wednesday, a deal that was up-sized on two different occassions, Cellectis (Nasdaq: CLLS), opened flat and traded down more than 5%. Cellectis was trading in the 36s during the pre-market session on Thursday.

“It is our strong opinion that the underwriters attempted to piggy-back off the success of two similar comps, Juno Therapeutics (Nasdaq: JUNO) & Kite Pharmaceuticals (Nasdaq: KITE),” senior managing partner at IPOBoutique, Scott Sweet, said. “The underwriters did not price this deal anywhere near a satisfactory normal risk/reward level.”

Is it greed? Is this the sign of the dreaded ‘top’ many speak of?

It surely is enough to scare some syndicate investors.

Biotech company’s make up the majority of the companies in the IPO pipeline. A correction in this sector of the market would certainly wreak havoc on the attempts of these type of company’s to go public. Thus far in 2015, 14 of the 28 company’s that have gone public have been biotech or healthcare related company’s.

How will a weak tape effect other sectors on the syndicate market?

It certainly brings fear and that’s not a recipe for an active syndicate side of things.

Solaredge’s Strong Demand

Despite the negative market, the SolarEdge Technology IPO received strong demand from investors. The company has invented an intelligent inverter solution that has changed the way power is harvested and managed in a solar photovoltaic system.  According to our sources, the deal was around 15x oversubscribed. Our subscribers have been in the know all week with how the book in this deal has been building.

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