Register for IPO Updates
US IPO Stats
IPO Industry Breakdown
Largest Global IPOs
Largest US IPOs
IPO News Archive
New Ways to Invest in IPOs - IPO ETFs
US IPO Recap: The IPO market finds a clearing price
Analyst IPO Market Commentary
Every one of the 10 IPOs last week priced at a discount to its original midpoint, including 8 that priced below the range. Over the past two weeks, 80% of IPOs had an opening price below the midpoint, with an average discount of 9.1%. Up until that point, 41% of the year's IPOs had priced below their midpoint, with an average discount of 3.4%. Based on the number of IPOs that were completed, we see that investor demand is present, but the year's poor aftermarket returns (-3%) have likely caused investors to require lower initial valuations. The Renaissance IPO ETF (symbol:
), a cap-weighted basket of newly public companies and indicator of post-IPO performance, points to better IPO market sentiment as the ETF experienced its first positive week since the first week of March. Even though only two companies launched during the holiday week, the eight new filers suggest that companies share that optimism and that the year's strong pace may not slow down.
Weibo rises as every IPO last week priced below its midpoint
Last week saw 10 of the originally scheduled 11 IPOs price. The eight that priced below the range produced lackluster average returns of 4%. The two that priced at the low end of the range (both Chinese companies) rose 19%. Weibo (
), the year's third Chinese IPO (and the largest since Renren in 2011), is China's largest microblogging service and is often compared to Twitter. Its offering bodes well for Alibaba, which owns 32% of the company and is expected to soon file for its own US IPO. Leju Holdings (
) also gained 19%; its online-to-offline services help users find real estate and receive discounts. Tencent owns 16% of the company, highlighting the
rivalry between it and Alibaba
, two of China's largest internet companies.
With just one biotech last week, this month's IPOs continue to diversify from last quarter's dominant industry. Tech continues to make a strong showing, while the financial sector has picked up. Two LBO’d companies, Sabre (
) and Sportsman's Warehouse (
), debuted on Friday but only gained 3%, closing under the low end of their proposed ranges. Paycom also had that distinction, trading at a notable discount to peer Paylocity (
) despite its superior margins. Paylocity's 19% decline since its March IPO could have led to the conservative valuation. Moelis & Company, an independent investment bank and financial advisor led by Ken Moelis, just barely stayed within its range as it rose 4%. Trivascular Technologies (
) priced below its range, but gained 19% a week after another stent maker, Lombard Medical, postponed its IPO.
IPO pricings (week of April 14, 2014)
Deal Size ($mm)
IPO Price vs. Midpoint
Return as of 4/18
TriVascular Technologies (
Low-profile stent grafts
China's largest microblogging service
Leju Holdings (
Chinese online real estate services
Paycom Software (
SaaS for payroll and HR management
Moelis & Company (
Investment bank and financial advisor
Global Distribution System for air travel
Sportsman's Warehouse (
Outdoor sporting goods retailer
Vital Therapies (
Biotech: bio-artificial liver cells
City Office REIT (
Office properties REIT
Opus Bank (
California-chartered commercial bank
Two small companies set terms
), set terms for a $40 million IPO on Thursday. It hopes to take share in the $4.3 billion market for Teva's Copaxone, a treatment for multiple sclerosis whose patent expires in 2014. Mapi's CEO launched Copaxone while at Teva and has led development of an enhanced generic version that requires monthly instead of daily injections. Tecogen (
), which produces natural-gas-powered cogeneration systems, set terms for an $11 million IPO. It previously planned to raise $20 million in September, but withdrew in October citing poor market conditions.
IPO terms filings (week of April 14, 2014)
Deal Size ($mm)
LTM Sales ($mm)
Biotech: enhanced generics including Teva's Copaxone
Combined heat and power cogeneration systems
Eight new companies file for an IPO, including Chukong and Zoosk
After eight companies filed to go public last week, this month is on track to be the most active April for new initial filings in over a decade, a measure we also saw in January, February and March this year. Chukong Technologies, a Chinese mobile game developer, filed for an IPO that could raise up to $150 million on Friday, one day after King Digital (
) announced that it had partnered with Tencent to launch Candy Crush in China. With Chukong generating 73% of revenue from its Fishing Joy series, the company's mobile gaming model draws comparisons to that of King, whose stock has fallen 21% since its IPO last month amid concerns of a dependence on one game. Zoosk operates its online data-driven dating platform for over 26 million members. The company turned profitable in the 4Q13, spent about 72% of revenue on marketing and generated $178 million in revenue last year for a 3-year sales CAGR of 52%. Additional filers included a niche-industry small business lender (Live Oak Bankshares,
), a Northwestern farming operation (Taggares Agriculture,
) and three biotechs. The largest new biotech, Zafgen (
), is a Cambridge, MA-based company that is developing a treatment for obesity.
IPO initial filings (week of April 14, 2014)
Deal Size ($mm)
LTM Sales ($mm)
Chukong Technologies (
Chinese mobile game developer
Data-driven online dating platform
Live Oak Bancshares (
Small business lender
Biotech: treatment for obesity
California-based financial services firm
Taggares Agriculture (
Grape and apple farming in the Pacific Northwest
Angion Biomedica (
Biotech: injured organ regeneration
Vyrix Pharmaceuticals (
Biotech: prevents premature ejaculation
IPO market snapshot
So far this year, 91 IPOs have raised $18.4 billion and produced an average first day return of 18%. The Renaissance IPO ETF (symbol:
) has fallen 1% compared with +1% for the S&P 500. Over the last 30 days, the IPO ETF has fallen 7% while the S&P 500 has remained flat. The improvement over last week's one-month decline of 11% suggests that IPO aftermarket returns may have hit their trough. The active IPO pipeline includes 116 companies looking to raise a total of $26.2 billion.
Keywords / Tickers:
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.
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.
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 which includes 500 U.S. listed companies and seeks to capture approximately 80% coverage of available U.S. market capitalization.
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 or Nasdaq.
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.