Secondary Offering Performance Review (5.31.17 – 6.02.17)

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This past week 11 secondary offerings came to market and IPO Boutique placed BUY ratings on 4 of them. In all, $2.21bn in cash was raised by companies in the secondary market this week as compared to $5.7bn last week.

The last 20 IPO Boutique ‘BUY’ rated secondary offerings have produced an average gain of 1.59% at first trade and an average gain of 3.92% at the high of their first-day of trading.

The secondary market was much lighter this week following the Memorial Day holiday. Many of our BUY rated offerings had subdued opening tick percentage performance this week and most rallied later in their debut day. As evidence, the four BUY rated offerings finished above their respective offering prices and averaged a 1.3% close higher as a group.

The largest offering this week was an upsized $438.8m block from Extended Stay America, Inc. (NYSE: STAY). The offering, underwritten by Citigroup and Morgan Stanley, proceeded to price with a five-cent discount to the last trade and opened 2.4% above the $17.55 offering price. Among deals which raised more than $20m, the best performing offering this week was another hotel and resort company, Park Hotels and Resorts (NYSE: PK). The offering, underwritten by Goldman Sachs, opened 2.8% above its offering price.

Other offerings that performed well that IPO Boutique had BUY ratings on were GMS, Inc. (NYSE: GMS) which opened 1.8% above its offering price and Air Transport Services Group Inc. (Nasdaq: ATSG) which closed its offering day 2.7% above its offering price.

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