No IPOs launched after President’s Day, as investors held their breaths and watched the news out of Europe. Three SPACs managed to price, apparently immune to market forces.
The IPO market returned +0.7% this week, in line with the S&P 500’s +0.8% gain. Marketing platform Sprout Social was the week’s winner, up +22.1% as it beat on 4Q earnings. Meanwhile, Russian e-commerce giant Ozon Holdings plummeted -38.8%, for obvious reasons.
Take a look at the chart of the Renaissance IPO Index. In a volatile week, the IPO market found some support at its previous low. That’s an encouraging sign. We believe IPO investors are looking for bargains after the recent sell-off. For context, last year’s software IPOs went public at about 22x trailing sales, but now trade around 12x on average. There’s also talk that the Fed will have a smaller rate hike in March.
We anticipate a slow month in March, as more companies plan to reassess market conditions at the start of the second quarter. When the IPO window does open again, hundreds of candidates appear to be waiting. This week, news broke that private equity firm L Catterton hired banks for a 2022 listing.
Take care,
Bill Smith
Co-Founder and CEO
Renaissance Capital
|
Biggest price changes through
Feb 25th
in the
Renaissance IPO Index
|
||
|---|---|---|
| Top 5 | ||
| Sprout Social | SPT | 22.1% |
| Playtika Holding | PLTK | 17.9% |
| DigitalOcean | DOCN | 15.0% |
| GlobalFoundries | GFS | 14.7% |
| Cloudflare | NET | 14.0% |
| Bottom 5 | ||
| Ozon Holdings | OZON | -38.8% |
| monday.com | MNDY | -20.3% |
| Beyond Meat | BYND | -15.0% |
| Asana | ASAN | -14.3% |
| UiPath | PATH | -13.6% |
| Sectors | ||
| Industrials | 4.6% | |
| Health Care | 2.5% | |
| Technology | 1.3% | |
| Financials | 0.8% | |
| Consumer Discretionary | -3.8% | |
| Consumer Staples | -5.5% | |
| Real Estate | -5.7% | |
Renaissance IPO ETF (NYSE symbol: IPO) tracks the Renaissance IPO Index
The Renaissance IPO Index returned 0.7% last week vs. 0.8% for the S&P 500.
