The February lull is over, and March is kicking off with two growth IPOs targeting almost $200 million in total.
Due to the government shutdown and poor 4Q18 returns, this year has seen only 11 IPOs raise $1.2 billion, down from 28 IPOs raising $10.9 billion at this point last year. However, we expect activity to normalize in March and April, helped by strong returns from recent IPOs; Renaissance Capital's IPO Index is up 31% year-to-date.
First up this week is ShockWave Medical (SWAV), planning to raise $75 million at a market cap of $428 million. The company is producing high losses, and its sonic wave-based device for treating cardiovascular disease has yet to reach significant scale with just $12 million in 2018 revenue. That said, its growth to date has been impressive, and it operates in a multi-billion-dollar market.
Hong Kong-based Futu Holdings (FHL) has rapidly become a favorite online brokerage among young Chinese investors. While it hit a speed bump in the fourth quarter, the profitable company saw its sales grow 160% in 2018 to more than $100 million. The Tencent-backed company plans to raise $120 million at a valuation of $1.3 billion.
Initial filings should continue to pick up, and look out for potential launches from jean giant Levi Strauss & Co. (LEVI), HR solutions provider Alight (ALIT), and liver disease biotech Cirius Therapeutics (CSTX).
| U.S. IPO Calendar | |||
|---|---|---|---|
| Issuer Business |
Deal Size Market Cap |
Price Range Shares Filed |
Top Bookrunners |
| ShockWave Medical (SWAV) Santa Clara, CA |
$75M $428M |
$14 - $16 5,000,000 |
Morgan Stanley BofA ML |
| Sells medical systems used in treating cardiovascular disease. | |||
| Futu Holdings (FHL) |
$120M $1,349M |
$10 - $12 10,900,000 |
Goldman (Asia) UBS |
| Fast-growing low-commission online brokerage in China. | |||
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IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. As of 2/28/19, the Renaissance IPO Index was up 29.7% year-to-date, while the S&P 500 had a gain of 11.5%. Renaissance Capital's IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include VICI Properties (VICI) and Altice (ATUS). The Renaissance International IPO Index was up 9.9% year-to-date, while the ACWX was up 9.7%. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include SoftBank and China Tower.
