The IPO Buzz: 2017’s Healthy First Half

The curtain came down on the first six months of 2017 on Wall Street on Friday, June 30, and all three major U.S. stock indexes closed higher. And the IPO market started coming back to life during the robust first half of the year. In short, a good time had by all.

The three major U.S. stock indexes turned in a great performance for 2017’s first half: The Dow Jones Industrial Average finished up 8.03 percent, the S&P 500 Index ended up 8.24 percent, and the NASDAQ Composite Index jumped 14.07 percent. From there, we go to the IPO market. The aftermarket performance for this year’s IPO traffic was up 12.8 percent from their initial public offering prices.

A total of 73 IPOs were priced during 2017’s first six months, according to the U.S. Securities and Exchange Commission filings. (See the notation below.) But the news was better than

Looking back over the last few years, from Jan. 1 through June 30, the reading had been discouraging. Consider the following:

  • 2017: 73 IPOs were priced. They raised $20.3 billion.
  • 2016: 34 IPOs were priced. They raised $5.8 billion.
  • 2015: 91 IPOs were priced. They raised $16.8 billion.
  • 2014: 141 IPOs were priced. They raised $30.5 billion.

(Note: These figures exclude unit offerings, bank conversions, “best efforts” offerings, blank checks, closed-end funds, companies trading on the OTC markets moving over to the NASDAQ and foreign-traded securities making their debuts in the U.S. capital markets. The latter are public offerings. Investors can buy the underlying shares on foreign exchanges before their U.S. pricing dates.)

The IPO Scorecard

By the end of June 2017, the scorecard for all 73 IPOs priced this year showed 46 winners and 27 losers – and the average aftermarket gain was 12.7 percent.

Among the 73 deals, there were three blockbuster offerings priced at over $1 billion each:

  • Snap (SNAP) priced 200 million shares at $17 each on March 1, 2017, to raise $3.4 billion. It closed Friday, June 30, at $17.77, up 4.53 percent from its IPO price;
  • Altice USA (ATUS) priced 63.9 million shares at $30 each on June 21, 2017, to raise $1.9 billion. It closed Friday, June 30, at $32.30, up 7.67 percent, and
  • Invitation Homes (INVH) priced 77 million shares at $20 each on Jan. 31, 2017, to raise $1.54 billion. It closed Friday, June 30, at $21.63, up 8.15 percent.

(For more information, please check the IPO profiles found on IPOScoop.com’s website.)

Cranking Up the Drug Machine

The busiest sector was pharmaceuticals, which priced 14 IPOs. Next on the list: The real estate investment trusts (REITs), which priced eight IPOs. The oil and gas sector priced seven IPOs, and the software sector priced six IPOs during the first six months of 2017.

The winner from 2017’s first half was Floor & Décor Holdings (FND), which priced 8.8 million shares at $21 each on April 26, 2017. It closed Friday, June 30, at $39.26, UP 87 percent.

The loser was Ramaco Resources (METC), which priced 6 million shares at $13.50 each on Feb. 2, 2017. It closed Friday, June 30, at $6.05, DOWN 55.2 percent.

July’s Tabula Rosa

This brings us to the week of July 3, 2017, which is a blank slate. The week is broken up by the July 4th holiday, which falls on Tuesday this year.

There is nothing on the IPO calendar at this time. Nevertheless, a lot could happen when the SEC’s filing window opens again on Monday morning.

Stay tuned.

Disclosure: Neither the author nor anyone else on the IPOScoop.com staff has a position in any stocks mentioned, nor do we trade or invest in IPOs. The author and IPOScoop.com staff do not issue advice, recommendations or opinion.