The year's first IPO is now on the calendar. This past week, New Fortress Energy (NFE) set terms to raise $400 million at a market cap of $3.0 billion.
The company is using IPO proceeds to build out its liquefied natural gas infrastructure, using vertical integration to lower transportation costs. New Fortress launched its offering despite the government shutdown and limited staff at the SEC. While that casts some uncertainty over the deal, it should benefit from being the only IPO in marketing.
The Renaissance IPO Index, which is comprised of the largest IPOs of the last two years, climbed 4.6% this past week, bringing the year-to-date total up to 14.0%. That is almost double the S&P 500's respective 1-week and YTD returns of 2.7% and 6.5%. As our CEO pointed out last week in his weekly Winners & Losers newsletter, IPOs tend to lead on the way down, as well as the way up. The outperformance over the past two weeks should bring more IPOs to market in February and March.
The Renaissance IPO ETF tracks the IPO Index.
Four companies filed for IPOs this past week: an $86 million medical device offering, two micro-caps, and a $250 million SPAC.
| 4 Filings During the Week of January 14th, 2019 | |||
|---|---|---|---|
| Issuer Business |
Deal Size |
Sector | Lead Underwriter |
| Avedro (AVDR) | $86M | Health Care | BofA ML |
| Sells ophthalmic medical systems used in treating corneal disorders. | |||
| DiamondPeak Holdings (DPHC.U) | $250M | SPAC | Deutsche Bank |
| Blank check company led by David Hamamoto, targeting the real estate industry. | |||
| Brainsway (BWAY) | $30M | Health Care | Cantor Fitz. |
| Sells medical devices that use magnetic stimulation to treat depression and OCD. | |||
| PCI Media (PCIM) | $17M | Communication Services | Roth Cap. |
| Produces animated television commercials and other media. | |||
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IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. As of 1/18/19, the Renaissance IPO Index was up 14.0% year-to-date, while the S&P 500 had a gain of 6.5%. Renaissance Capital's IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include VICI Properties (VICI) and Spotify (SPOT). The Renaissance International IPO Index was up 3.4% year-to-date, while the ACWX was up 6.2%. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include SoftBank and China Tower.
