Credit: Shutterstock photoTwo IPOs raised a combined $574 million this past week and notched modest gains. Pigments supplier Venator Materials raised $454 million and ultra-rare bone disease biotech Clementia Pharmaceuticals raised $120 million.
July 2017 was the least active July since the financial crisis with 9 IPOs. Per usual, August should also have a tepid pace; with just 3 deals scheduled for the week ahead, it could end up as the slowest August in 6 years. However, we expect normal deal flow to resume after Labor Day.
Tech stocks slid this past week with Tintri ( TNTR ), Blue Apron ( APRN ), Snap (SNAP) and Carvana (CVNA) all experiencing losses. Average aftermarket return declined to 0.4%, nearing its 2017 low. However, high-growth Redfin (RDFN) popped 45% on its IPO and continued to trade up this week; it is now the second-best performing IPO of the year behind Akcea Therapeutics (AKCA), another July IPO. Other growth companies such as Floor & Decor Holdings (FND) and SMART Global Holdings (SGH) have also performed well this year.
Find out why institutional investors rely on Renaissance Capital's Pre-IPO Research for these IPOs. Follow us on Twitter ( @IPOtweet ) for IPO news as it happens and register for our updates on the IPO market.
An immaterial gain for Venator
Huntsman ( HUN ) spinoff Venator Materials (VNTR) offered 22.7 million shares at the $20 low end of the range to raise $454 million. The TiO2 pigments and additives manufacturer finished the week up 3%. Venator has rapidly grown segment EBITDA and its peers have traded well, however, Huntsman's plan to sell down its position over the next year likely weighs on investors' minds. Venator's long-term success depends on the continued rebound of the cyclical TiO2 industry.
Upsized offering for ultra-rare bone disease biotech
Clementia Pharmaceuticals (CMTA) priced an upsized offering of 8 million shares at the $15 high end of the range. Backers OrbiMed, NEA and others indicated on $30 million of the IPO. Since May, the average biotech IPO has returned +17% and short term trading could be buoyed by positive Phase 2 data. However, key issues include a tiny target population and increased scrutiny of drug prices.
IPO Pipeline Update: Cars, construction and diagnostics
Elio Motors (ELIO), which is developing fuel-efficient three-wheeled vehicles, filed for a $100 million IPO; it previously raised $16 million in a Regulation A filing in February 2016, when it listed on the OTCQX. RETO Eco-Solutions (RETO), a Chinese supplier of eco-friendly construction materials, filed to raise $14 million. Lung cancer diagnostics firm ProLung (LUNG) filed for an $8 million IPO. Newly-formed mortgage REIT Tremont Mortgage Trust (TRMT), home builder US LBM (LBM) and fracker FTS International (FTSI) all updated their filings this week. Two SPACs, I-AM Capital Acquisition (IAMXU) and Capitol Investment Corp. IV (CIC.U) also updated their fillings.
IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. The Renaissance IPO Index is up 23.6 % year-to-date, ahead of the S&P 500, which is up 10.6 % . Renaissance Capital's IPO ETF ( IPO ) tracks the index, and top ETF holdings include Ferrari (RACE) and First Data (FDC). The Renaissance International IPO Index is up 21.4 % year-to-date, while the ACWX is up 17.9 % . Renaissance Capital's International IPO ETF ( IPOS ) tracks the index, and top ETF holdings include ABN AMRO Group and Worldpay . To find out if this is the best ETF for you, visit ourIPO Investing page . The article US IPO Weekly Recap: Two IPOs start off the annual August lull originally appeared on IPO investment manager Renaissance Capital's web site renaissancecapital.com.
Investment Disclosure: The information and opinions expressed herein were prepared by Renaissance Capital's research analysts and do not constitute an offer to buy or sell any security. Renaissance Capital, the Renaissance IPO ETF (symbol: IPO) or the Global IPO Fund (symbol: IPOSX) , may have investments in securities of companies mentioned.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
