Weekly Secondary Performance Report – Ending 11.10.17

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This past week 23 secondary offerings came to market and IPO Boutique placed BUY ratings on 9 of them. In all, $4.0bn was raised by companies in the secondary market this week.

The average gain of IPO Boutique BUY rated offerings this week at first trade was 2.0%

The average gain of IPO Boutique Neutral rated offerings this week at first trade was 0.3%.

The last 20 IPO Boutique ‘BUY’ rated secondary offerings have produced an average gain of 1.65% at first trade and an average gain of 5.62% at the high of their first-day of trading.

The follow-on offering market was robust as companies began to tap the equity markets and existing shareholders were looking to cash out with many block offerings- post earnings. The large quantity of blocks was expected and we believe these “could” continue in the upcoming week. The underwriter’s, as is often the case with blocks, were pricing them with little discount.

We have noticed the number of biotech offerings have begun to fade and, if this week is any indication, the green light is being given to energy companies. Among those who had successful offerings from the energy sector were ProPetro Holdings (PUMP), SRC Energy (SRCI) and Solaris Oilfield Infrastructure (SOI) who each opened 3.2%, 2.9% and 5.4% above their offering prices respectively. We tabbed each of those deals with BUY ratings.

We did not do the same for the largest deal of the week, Centennial Resource Development (CDEV). The Goldman Sachs underwritten deal has historically underperformed when tapping the syndicate markets and this week was no different with a first trade -0.3% below the offering price and a subsequent close -0.8% in the red.

There are currently two secondary offering being marketed for the upcoming week, Dolphin Entertainment (DLPN) and Seanergy Maritime (SHIP).

You can indicate for each of the deals through the selling group, Motif.