Just one small blank check company went public this past week, in the doldrums of the IPO market’s annual summer slowdown. Stellar Acquisition III (STLRU), which raised $65 million in a downsized offering, is a Greece-based SPAC looking to acquire an energy logistics business, such as a tanker operator. We do not include SPACs in our IPO stats.
The average IPO from 2016 is up 29.5%, a nearly 9-point increase over the prior week. Every IPO outside of the health care sector is trading above issue. As we noted earlier in the week, tech IPOs have done particularly well, averaging a gain of +96%, or +119% excluding two micro-cap listings. Those strong returns should drive a long overdue pickup in tech IPO activity in the fall.
|2016 IPO Industry Breakdown: Tech Leads, Health Care is Only Sector with Broken IPOs|
|Sector||# of IPOs
(% of total)
|Avg. IPO Return
|Business Services||1 (2%)||$238||100%||+69%|
|Capital Goods & Services||3 (5%)||$408||100%||+31%|
|Health Care||30 (51%)||$2,572||53%||+13%|
|All 2016 IPOs||59 (100%)||$9,832||76%||+30%|
IPO Pipeline update: Three companies file, others amend
The US IPO pipeline contains at 97 companies, including 32 that have filed or updated in the past 60 days. IPO filing activity is expected to pick up next week as companies prepare for post-Labor Day launches, but three companies had a head start on Friday. The most notable new filing came from Everbridge (EVBG), a fast-growing provider of cloud-based enterprise software looking to raise $90 million. The other two new filers were FB Financial ((FBK); $115mm), Tennessee’s third-largest bank, and Thar Pharmaceuticals ((THAR); $50mm), a biotech focused on non-opioid treatments for pain. Signaling IPO plans, amended S-1s were filed by Nutanix (Private:NTNX), Tabula Rasa Healthcare (Pending:TRHC) and PSAV ((Pending:PSAV); postponed in June).
IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. The Renaissance IPO Index is flat year-to-date, while the S&P 500 is up 7%. However, the IPO Index has outpaced or tied the S&P in each of the past 9 weeks. Renaissance Capital’s IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include Alibaba (NYSE:BABA), Synchrony Financial (NYSE:SYF) and Citizens Financial Group (NYSE:CFG). The Renaissance International IPO Index is down 1% year-to-date, compared to +4% for ACWX. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include NN Group and Aena S.A.