US IPO Weekly Winners & Losers

Every active investor should follow the IPO market. Why?

The IPO market gives you a front-row seat to the direction of equity markets.

The S&P 500 briefly crossed into a bear market on Friday. However the IPO market was flashing red as early as December. Time and again we see IPOs serve as a barometer on the way up and down, months before the broader market turns.

Two small IPOs began trading this week, a cannabis grower and a Canadian education company. Both saw the same “pop-and-drop” trading pattern as other recent small deals. Two SPAC mergers also closed this week with disappointing results. A whopping seven SPACs announced mergers, including Paul Ryan’s ENPC, which plans to buy an energy E&P.

The IPO pipeline remains largely frozen, though AIG spinoff Corebridge Financial (NYSE: CRBG) updated financials in a sign that it may still come in the second quarter. A number of consumer companies have also updated recently.

News broke that one of the world’s most valuable pre-IPO unicorns, payment platform Klarna may raise funding well below its last valuation. That’s just the tip of the down-round iceberg, as private rounds usually lag public markets.

The IPO market closed -2.9% lower this week, compared to -3.0% for the S&P 500. COVID-19 vaccine developer CureVac was the IPO Index’s winner up +19.6%, while plant-based meat supplier Beyond Meat lost -22.0% after earnings.