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
Week ahead: Fourth quarter kicks off with 11 IPOs set for the week of October 5
Analyst IPO Market Commentary
As many as 11 companies could go public this week, including the year's largest IPO (Digicel) and the fastest-growing company (Pure Storage). Both have proposed market caps of more than $3.5 billion, while six others target valuations of $300 million or less.
Last week, there were also 11 IPOs set to price, but
only 5 got through
, and each came in significantly below the range. Of the 139 IPOs this year, 60% of now trade below the offer price. For the 11 deals on the
this week, expect heavy pushback on valuations to continue, as others are unable to price at all.
Digicel: Looking to raise $1.8 billion in the year's largest IPO to date
As we noted in our
3Q 2015 IPO Market Review
, the fourth quarter should see a number of large IPOs with massive debt. The first of these mega-deals, Caribbean wireless provider
), is set to raise $1.8 billion in the week ahead. That would make it the year's largest IPO so far by about +50%. The telecom has the dominant position in primary markets Haiti, Jamaica and Papua New Guinea, but must manage $5.3 billion in debt (4.5x LTM EBITDA), some of which was used to pay insiders over $1 billion in distributions during the prior two years.
The data storage all-star: Tech unicorn Pure Storage tests IPO market
Over 100 companies have achieved private market valuations of $1 billion or more, but these "unicorns" are a much rarer sight in the IPO market.
) is set to be the year's second high-profile unicorn to go public after Box's (
; -17%) January IPO. It is also the second tech IPO in the 2H15, following Rapid7's (
; +39%) offering in mid-July. Pure
has grown faster
than any one of its storage peers, as gross bookings nearly quadrupled to $231 million during its last fiscal year. With an accumulated deficit of $455 million, the company has also produced significant losses as it aggressively markets its all-flash enterprise storage solution against industry-leader EMC.
What's in your wallet? Likely a credit card made by CPI Card Group
CPI Card Group
) is the week's third-largest IPO, set to raise $300 million at a valuation of $867 million ($1.2 billion enterprise value). It has the largest market share in the US (35%) for plastic credit and debit cards, and sales grew 80% to $173 million in the 1H15 as US banks increasingly issue chip cards. However, growth will slow after that transition is complete, and mobile payments could eventually begin to replace credit cards. CPI is the week's only IPO to have insider selling - PE backer Tricor and CEO Steven Montross are floating about half of the deal.
Houston, we have a banking IPO
Based in Houston, Texas,
) will attempt to raise $60 million at a market cap of $291 million this week. The regional bank has $2 billion in assets and a ROE of about 7.5%. Of note, all six of the year's bank IPOs trade above their offer price, and average a gain of 15%. However, last year's Houston-based bank, Green Bancorp (
), trades below its offer price, and is off 22% in the past three months.
Four biotech IPOs
Despite recent turmoil in biotech stocks, five are attempting to go public this week. Last week, Edge Therapeutics (
) gained 59% by Friday suggesting the window for biotech IPOs is not closed. However, Mirna Therapeutics (
) ended the week flat while NovoCure (
) was down 17%.
Backed by Third Rock Ventures, Fidelity and Pfizer,
) is the week's largest biotech, looking to raise $100 million at a market cap of $585 million. With only preclinical data, it may also be in the earliest stage of development. Previous Third Rock biotech IPO Global Blood Therapeutics (
) popped 116% on its first day and has traded up from there. Biotechs without Phase 1 data are inherently a leap of faith, and while CytomX targets the white-hot area of tumor-activated cancer immunotherapies, investors may equate that with a higher chance of getting burned.
Backed by Vivo, Fidelity and Sofinnova,
) is set to begin pivotal Phase 3 trials in the beginning of 2016 for its hydrogen peroxide-based treatment for extremely common skin lesions. Led by an experienced management team, the biotech targets a massive market for which there is no prescription treatment, but its therapy would likely not be reimbursed by payors, and most skin lesions go untreated. RA Capital-backed
(SBBP) had been on the calendar for last week, though IPO investors may have been skeptical at a valuation pitched 20% above its June 2015 valuation. The company has raised $70 million in private funding since last year as it develops and acquires a portfolio of therapies for rare endocrine disorders - a market opportunity of more than $1 billion. The smallest of the microcaps with a diluted valuation of $71 million, depression biotech Cerecor (
) recently added dilutive warrants to the offering, making the biotech more attractive for IPO buyers, but its common stock more expensive in the aftermarket.
Three more delayed microcap IPOs are back
Two profitable Chinese manufacturers will again attempt to price IPOs this week. These include
Sole Elite Group
), which makes athletic shoe soles, and
), which produces disposable plastic cutlery for US fast food chains. SynCardia Systems (
) is developing and commercializing the only total artificial heart available in the US, the EU and Canada.
Renaissance Capital's IPO Calendar - Week of October 5, 2015
$13 - $16
Leading provider of mobile services in the Caribbean with 14 million subscribers.
Mountain View, CA
$16 - $18
Provides flash memory-based enterprise storage hardware.
CPI Card Group
$16 - $18
BMO Capital Markets
Largest US provider of plastic credit and debit cards.
South San Francisco, CA
$14 - $16
BofA Merrill Lynch
Preclinical biotech developing tumor-activated cancer immunotherapies.
BofA Merrill Lynch
Late-stage biotech developing therapies for rare endocrine disorders.
$14 - $16
Developing a proprietary hydrogen peroxide treatment for common skin lesions.
$22 - $24
Commercial bank with 16 locations in Houston and $2 billion in assets.
Sole Elite Group
$10 - $12
Chinese athletic shoe sole manufacturer.
$10 - $12
Developer and manufacturer of temporary implantable artificial hearts.
$6 - $7
Developing a novel adjunct therapy for major depressive disorder.
Chinese producer of disposable plastic cutlery and other food service products.
Find out why institutional investors rely on Renaissance Capital's
for these IPOs.
Follow us on Twitter (
) for IPO news as it happens and
register for our updates
on the IPO market.
2 Mega LBOs set terms for IPOs next week
Including Digicel, three companies are already on the
to raise more capital ($6.4 billion) than all 34 IPOs from the third quarter combined ($5.1 billion). Last week, large pre-crisis LBOs
) set terms to raise $1.6 billion and $3.0 billion, respectively, during the week of October 12. Last year's largest IPO, Alibaba (
; $22 billion deal size), went public as broader markets roared upward, but these three high-debt heavyweights are coming to market in a period of choppiness and "buyer power" in the IPO market. It could also be their last chance to go public before interest rates rise.
IPO pipeline update: Two biotechs and one more billion-dollar LBO file
Two biotechs submitted initial filings last week, including Third Rock Ventures-backed MyoKardia (
), in Phase 1 trials for hypertrophic cardiomyopathy. Advanced Accelerator Applications (
) refiled to raise $75 million after it withdrew an IPO in February. The third IPO filer, KKR-backed Laureate Education (
), could raise an estimated $1 billion to pay down debt. Previously Sylvan Learning Systems, Laureate is the largest provider of for-profit higher education.
IPO Market Snapshot
The Renaissance IPO Index has traded down 10.2% year-to-date, compared to -5.2% for the S&P 500. Renaissance Capital's
(NYSE: IPO) tracks the index, and
top ETF holdings
include Alibaba (
), Hilton Worldwide (
) and Twitter (
). The Renaissance International IPO Index has traded down 5.2% year-to-date, compared to -7.2% for the ACWX. Renaissance Capital’s International
(NYSE: IPOS) tracks the index, and
top ETF Holdings
include Recruit Holdings and Cheil Industries.
To find out if this is the best ETF for you, visit our
IPO Investing page
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.