The Renaissance IPO Index dipped to a 5-month low, effectively wiping out the summer rally. Ditto for the S&P 500. Our IPO Pro market indicator has been stuck at Cautious for 79 days and counting.
We see a few notable deals on the horizon, but the next true IPO cycle won’t start until 2024.
If a normal, healthy IPO market regularly has 10+ sizable listings a month, then we’re now at month 22 of dampened activity. That’s officially longer than the period after the Great Financial Crisis (21 months). However, not quite as long as the post-internet bubble drought (~34 months).
Click here for the clearer full-sized version. Here’s that same chart overlaid on the Federal Funds Rate. As we saw this summer, expectations of a more dovish Fed can goose new listings, but the IPO market can still produce solid deal flow in higher-rate environments (1995-2000, 2004-2007).
Oil & gas producer Mach Natural Resources LP (NYSE: MNR) raised $190 million this week, the first energy IPO in 5 months. Mach finished the week just below issue. A near 0% return isn’t ideal, but unlike with most IPOs, anyone buying this MLP is more focused on the double-digit dividend yield than capital gains.
The calendar is quiet, with construction firm Shimmick (Nasdaq: SHIM) on tap to raise $50 million this coming week. Hospital software provider Waystar (Nasdaq: WAY) and insurer Hamilton Insurance (NYSE: HG) are good candidates to launch roadshows.
The IPO market traded off -3.7% vs. -2.5% for the S&P 500. Talent agency Endeavor Group was the week’s clear winner, up +27.2% on news that it’s considering a PE buyout. Auto rental agency Hertz Global sank -21.1% after earnings came in softer than expected.
Take care,
Bill Smith
Co-Founder and CEO
Renaissance Capital
|
Biggest price changes through
Oct 27th
in the
Renaissance IPO Index
|
||
|---|---|---|
| Top 5 | ||
| Endeavor Group Holdings | EDR | 27.2% |
| Full Truck Alliance | YMM | 6.0% |
| Miniso Group Holding | MNSO | 3.7% |
| Nextpower (Nextracker) | NXT | 1.6% |
| Lufax Holding | LU | 0.0% |
| Bottom 5 | ||
| Hertz Global Holdings | HTZ | -21.1% |
| Maravai LifeSciences | MRVI | -10.0% |
| Kenvue | KVUE | -7.8% |
| Global-E Online | GLBE | -7.5% |
| Affirm Holdings | AFRM | -7.2% |
| Sectors | ||
| Industrials | 0.2% | |
| Consumer Discretionary | -2.7% | |
| Financials | -2.7% | |
| Technology | -3.6% | |
| Health Care | -6.6% | |
| Consumer Staples | -7.8% | |
Renaissance IPO ETF (NYSE symbol: IPO) tracks the Renaissance IPO Index
The Renaissance IPO Index returned -3.7% last week vs. -2.5% for the S&P 500.
