Weekly Secondary Performance – Week ending 9/8/17

You can Subscribe to IPO Boutique’s Secondary Only Service by clicking here:

This past week 18 secondary offerings came to market and IPO Boutique placed BUY ratings on 8 of them. In all, $5.4bn 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 3.0%

‘The average gain of IPO Boutique Neutral rated offerings this week at first trade was 0.8%.

The last 20 IPO Boutique ‘BUY’ rated secondary offerings have produced an average gain of 2.31% at first trade and an average gain of 4.19% at the high of their first-day of trading.

It was a first active week for secondary offerings since the middle of August as a number of companies launched marketed deals this week. Two of the best deals this week were Insmed Inc (INSM) and 2U Inc (TWOU) which opened 4.2% and 2.6% above their offering prices respectively. Each of these stocks traded extremely well in the aftermarket and closed their offering days up 7.4% and 10.2%, respectively. IPO Boutique placed BUY ratings on each of these.

One of the largest offerings this week was GoDaddy’s $882m overnight cash raise. Morgan Stanley and Goldman Sachs priced the 20.05mm share offering at $44.00 — a 2.6% discount to a $45.18 trade. The offering opened -0.4% and never traded above its $44.00 final pricing on its offering day.

Another disappointing secondary offering was the performance of Alteryx (AYX). The company utilized the SEC’s new ‘confidential filing’ rules but marketed its offering for a full two days. Despite being a reported three-times oversubscribed, the deal opened 2.1% below its $21.25 offering price and was under pressure all day. The deal ultimately closed 8.1% below the offering price. This is a clear indication that companies and banks need to re-examine the process of launching a deal after confidentially filing an offering as it is being met with pushback by investors. The Alteryx disaster was the second such occurrence as Floor & Decor (FND) struggled mightily in its confidentially filed follow-on offering in July (closed 3.8% below offering price).

There is currently one secondary offerings on the schedule for the upcoming week, Grupo Supervielle S.A. (SUPV).