US IPO Weekly Winners & Losers

Two tech unicorns. One lesson: Investors need to see a company’s growth to believe it.

Cybersecurity firm Netskope (Nasdaq: NTSK) priced at the high end of the revised range to raise $908 million and traded up +30% for the week. Meanwhile, ticket resale platform StubHub (NYSE: STUB) priced at the midpoint and plummeted -21% by Friday’s close.

Both names wanted to get credit for ~30% growth next year. But unlike Netskope, StubHub’s growth slowed to a crawl in the past two quarters, while margins faltered. Usually companies go public after an outstanding quarter – StubHub did not, and now investors want to see results before paying up.

We’ve seen some explosive debuts in recent months, fueled in part by the drought of quality VC-backed deals. Clearly some of that hype has faded. Though, in the long run, this sort of pricing discernment is good for investors.

Two PE-backed issuers also listed this week. Oilfield services provider WaterBridge (NYSE: WBI) priced at the high end and delivered a decent +15% gain for the week. E-commerce accelerator Pattern (Nasdaq: PTRN) priced at the midpoint and while it opened below offer, ended up +12%.

No major launches this week, and nothing currently scheduled for the week ahead, though a few more deals could pull the trigger before quarter end. We do expect more companies to join the pipeline as the “wait-and-see” crowd digests the past weeks’ debuts.

Despite a dip on Friday, the Renaissance IPO Index continued its winning streak and ended the week up +2.2% (vs. +1.2% for the S&P 500). Chinese autonomous driving play Pony AI led a tech-heavy list of winners, surging +38.2% on plans to roll out its robotaxi service in Qatar. Delivery platform Instacart traded off -10.5% after some insider selling.