Register for IPO Updates
Our Passion for IPOs
Largest Global IPOs
Largest US IPOs
Largest US IPOs YTD
Top First Day Returns
US IPO Stats
IPO Industry Breakdown
AWARD WINNER 2015
North American ETF Provider
Follow us on g+
Like us on Facebook
Follow us on LinkedIn
Free iPhone App
Free Android App
IPO News Feed
IPO News Archive
New Ways to Invest in IPOs - IPO ETFs
Caesars stands out in a busy pricing week with strong returns
Analyst IPO Blog
This week saw 8 IPOs completed, the most deals priced since the week of December 12th (which itself was the busiest week of 2011) and the returns left investors happy. Despite significant pricing pressure (only two managed to price at the midpoint; the rest were lower), all but one of the deals were completed, with an average first day return of 19%. Performance was especially positive in light of the prior week, when three companies postponed and three of five traded down on the first day. Instead, the week was in keeping with the theme of 2012 so far; while almost every 2012 IPO has faced pricing pressure, the average stock has provided a healthy 15% return to date, and the
FTSE Renaissance US IPO Index
), which tracks a basket of IPOs from the past two years, is up 13% year-to-date, compared with 8% for the S&P 500.
Wednesday was a particularly busy day for IPO debuts, as five companies (the most on a single day since January 2011)
) was the top performer by far, gaining 71%. The casino giant raised $16 million by offering 1.8 million shares at the $9 midpoint. The deal was strikingly small: only 1.4% of shares outstanding were offered as the deal was structured to provide liquidity to insiders, particularly troubled hedge fund Paulson & Co., none of whose shares are locked up. Such a small float can create volatility, and the supply-demand dynamic seems to have outweighed our concerns about leverage (11x pro forma Debt/LTM EBITDA), declines in revenue and the uncertainty around online gaming; the first-day volume was 11.6 million shares, over six times the number sold in the offering. Additionally, the high leverage means that multiple expansion/contraction will result in huge moves to the stock; the stock's 71% gain resulted in the 2012 EV/EBITDA multiple only increasing from 9.1x to 9.5x.
The next biggest winner was offshore IT services provider
), the lone technology company to price this week. It posted an impressive 17% gain after cutting its deal size by 43%. The company raised $72 million by offering 6 million shares at $12, down 29% from the $17 midpoint. Whereas more than
half of technology companies priced up in 2011
, only one of four, Guidewire (
), has done so in 2012. What has not changed is the trend of positive first day returns: After EPAM's gain, the 1Q12 becomes the seventh straight quarter in which the average technology company has gained at least 15% in its debut. Overall, tech IPOs since the 4Q12 have gained 41% to date.
), which develops treatments for Crohn's disease and rheumatoid arthritis with Glaxo, became the third biotech, after Verastem (
) and Cempra (
), to trade up, gaining 10% in its first day. It raised $45 million by offering 4.5 million shares at $10, well below the range of $14 to $16. ChemoCentryx continues a trend from 2011, when only one of eight biotechs priced above the midpoint (compared to 40% of all 2011 deals). That group has produced an average return of 7% to date.
), a Midwestern supermarket chain with 158 stores, gained 5.9% after decreasing its deal size. It raised $163 million by offering 19.2 million shares at $8.50. The original terms were 18.2 million shares at $10 to $12, for a deal size of $200 million.
Cementos Pacasmayo SAA
), a Peruvian cement producer, raised $230 million by offering 20 million ADRs at $11.50, the low end of the range. The stock, which already traded on the Lima Stock Exchange, was the only one of Wednesday's crop to fall after its debut, down 3.7% after its first day of trading.
Thursday saw only one IPO after Ceres (NASDAQ:
) pushed back its offering to next week. However,
), which operates a leading institutional foreign exchange trading platform, continued Wednesday's theme by pricing below the range and still trading up. The company raised $62 million by offering 5.2 million shares at $10, below the range of $13.50 to $15.50, and the stock was up 14% after it started trading yesterday.
Last night, two more deals priced. Waste containment company
) priced at the $9 midpoint and raised $63 million by offering 7.0 million shares. GSE had initially planned to price in December with a deal size of $126 million.
), which enables cable TV firms to offer consumers online content and services, raised $34 million by pricing its 6.8 million share IPO at $5. Synacor had planned to raise twice as much before cutting its price range in half in a filing yesterday.
Keywords / Tickers: IPOPricings, CZR, CPAC, CERE, CCXI, EPAM, FX, GSE, RNDY, SYNC
Recently Priced IPOs
ETF Express Award:
ETFExpress awards are based on a 'peer review system' whereby readers - including institutional and high net worth investors as well as managers and other industry professionals at fund administrators, brokers, custodians and advisers - are invited to elect a 'best in class' in a series of categories via an online survey. In each category, the firms with the most votes at the end of the voting period are subject to a final review by ETFExpress's Senior Editorial team.
Past performance does not guarantee future results. The performance data quoted represents past performance and current returns may be lower or higher. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than the original cost. Investors should consider the investment objectives, risks, charges and expenses carefully before investing.
As stated in the Prospectus, the total annual operating expenses for the Fund was 3.48%. The Adviser has contractually agreed to keep net expenses from exceeding 2.50% of the Fund's average daily net assets for at least a year from the date of the Prospectus and for an indefinite period thereafter subject to annual re-approval of the agreement by the Board of Trustees.
An investor cannot invest directly in an index. Index returns do not represent Fund returns. The Index does not charge management fees or brokerage expenses, nor does the Index lend securities, and no revenues from securities lending were added to the performance shown.
Definitions: Net Asset Value (NAV) of the fund is calculated by dividing the total value of all the securities in its portfolio, less any liabilities, by the number of fund shares outstanding. Market Price is current value at which an asset or service can be bought or sold. Premium/Discount is provided to show the comparison of the daily net asset value (NAV) and the midpoint of the closing bid/ask for each of the funds. The
Renaissance IPO Index® (IPOUSA)
is a stock market index based upon a portfolio of U.S.-listed newly public companies that includes securities prior to their inclusion in core U.S. equity portfolios. The
Renaissance International IPO Index® (IPOXUS)
is a stock market index based upon a portfolio of newly public companies listed on non-U.S. exchanges. The S&P 500® Index (SPX) is a stock market index based on the market capitalizations of 500 large companies whose common stock is publicly traded on the NYSE.
Risk Disclosure: Investments in the
Renaissance IPO ETF, symbol "IPO"
Renaissance International IPO ETF, symbol "IPOS"
(the "ETFs"), and the
Global IPO Fund, symbol "IPOSX"
(the "Mutual Fund") are subject to investment risk, including possible loss of the principal amounts invested. The ETFs and the Mutual Fund (the "Funds") invest in companies that have recently completed initial public offerings. These stocks are unseasoned equities lacking trading history, a track record of reporting to investors and widely available research coverage which many result in extreme price volatility. Due to a greater number of IPOs in certain segments, the Funds may also be subject to information technology and financial sector risk, small and mid-capitalization company risk, and, for the Renaissance International IPO ETF, emerging markets risk. The Funds may hold securities in the form of Depository Receipts, REITs, and Partnership Units which have greater risks than common shares. The strategies have high portfolio turnover and securities lending risks. The returns of the ETFs may not match the return of the respective indices. The ETFs are classified as non-diversified investment companies subject to concentration risk.
Prospectus: Investors should consider the investment objectives, risks, charges and expenses carefully before investing. For a prospectus and/or summary prospectus with this and other information, please visit
. Read the prospectus carefully before investing. Renaissance Capital Investments, Inc., distributor for the Mutual Fund. Foreside Fund Services, LLC, distributor for the ETFs, 1-866-486-6645.
Definitions: The Renaissance IPO Index® is a stock market index based upon a portfolio of U.S.-listed newly public companies that includes securities prior to their inclusion in core U.S. equity portfolios. The S&P 500® Index is a stock market index based on the market capitalizations of 500 large companies whose common stock is publicly traded on the NYSE.
The information contained herein is proprietary and copyrighted. The media is welcome to use our information and ideas, provided that the following sourcing is included: Renaissance Capital - manager of IPO-focused ETFs.
The information and opinions expressed herein were prepared by Renaissance Capital's research analysts and do not constitute an offer to buy or sell any security. Renaissance Capital, the Renaissance IPO ETF (symbol: IPO), the Renaissance International IPO ETF (symbol: IPOS), or the Global IPO Fund (symbol: IPOSX), may have investments in securities of companies mentioned.
Register for Updates
Renaissance Capital LLC is an SEC-registered investment adviser.
Renaissance Capital Investments, Inc. is a
-registered broker-dealer, and member of
© 2016 Renaissance Capital LLC. All rights reserved.