Four companies publicly listed on US markets during the last full week of the first quarter, raising $510 million.
Solar tech provider SolarEdge outshined its peers while mega biotech Cellectis saw speculators jump in before the IPO and then quickly jump out. In the week ahead, GoDaddy (GDDY) is expected to raise $400 million.
SolarEdge: A bright spot in the IPO market
SolarEdge Technologies (SEDG) priced at the high end of its range and traded up 17% by Friday close. The company provides optimized components to solar panel installers - notably SolarCity (SCTY) - and its high growth potential combined with profitability provided an attractive backdrop. Close competitor Enphase Energy (ENPH) is up about 120% from its 2012 IPO.
Cellectis not selected: Cancer immunotherapy biotech overheats
Cellectis (CLLS) was the week's largest US IPO, and its $228 million deal size makes it the second largest biotech IPO in at least eight years, behind December's Juno Therapeutics (JUNO; $265mm, +136%). However, investors could have bought shares in the preclinical gene-editing cancer biotech prior to the IPO, as it was already trading in Paris. And it looks like they did just that; the stock rose over 200% year-to-date leading up to its US offering, achieving a market value of nearly $1.5 billion. Then IPO investors were left holding the bag, as the stock sank 15% from its offer price by end-of-week. Despite a notable collaboration deal with Pfizer (NYSE: PFE), "preclinical" still means "ultra-risky."
Flat financials: a REIT and a bank trade flat
Jernigan Capital, (JCAP), a mortgage REIT focused on funding self-storage facilities, priced at its midpoint and stayed there, ending the week up just under 2%. Franklin Financial Network (FSB), a bank in the Nashville MSA with $1.4 billion in assets, priced below its proposed range and traded flat. Jernigan Capital was the year's fourth REIT IPO and Franklin Financial was the fourth regional bank.
2 Chinese "best efforts" IPOs and 2 delayed health care
Tantech Holdings (TANH) was technically the week's top-performing IPO; the Chinese consumer goods company gained 100% on its first day and finished the week up 70%. However, as a microcap "best-efforts" offering, it is excluded from our IPO stats. Another Chinese best-efforts IPO, Wowo (WOWO) pushed back its deal to next week.
Valeritas (VLRX) was scheduled to raise $75 million but instead became the quarter's second insulin delivery device maker to postpone an IPO, after Asante Solutions (PUMP) in February. ViewRay (VRAY), which makes the only MRI-guided radiation therapy system, delayed its $52 million offering to next week.
| IPO pricings (week of March 23, 2015) | |||||
| Company (Ticker) | Business | Deal Size ($mm) | IPO Price vs. Midpoint | 1st-day Pop | Return as of 3/6 |
| SolarEdge Technologies (SEDG) | Solar energy tech | $126 | 6% | 15% | 17% |
| Jernigan Capital (JCAP) | Mortgage REIT | $100 | 0% | 2% | 2% |
| Franklin Financial Network (FSB) | Tennessee bank | $55 | -18% | 0% | 0% |
| Cellectis (CLLS) | Immunotherapy | $228 | 0% | -5% | -15% |
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IPO market snapshot
The Renaissance IPO Index, a market cap weighted basket of newly public companies that is designed to represent the US IPO market, has traded up over 6% year-to-date, compared to 0% for the S&P 500. This suggests that the IPO market remains open to new issuance heading into the 2Q 2015. Renaissance Capital's IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include Twitter (TWTR), Alibaba (BABA), Hilton (HLT), Ally Financial (ALLY) and Voya Financial (VOYA). To find out if this is the best ETF for you, visit our IPO investing page.
