The IPO Buzz: A Flop, A Moonshot & A Traffic Jam

The IPO market ended with a flop, a pop and a moonshot last week. This week features an IPO traffic jam: Six IPOs are set for pricing on Thursday night to raise almost $3.1 billion. The observance of Yom Kippur from sundown Tuesday through Wednesday evening all but closes Wall Street down.

Worth noting: Three of the five IPOs priced last week were companies based in China.

Swing Low, Fly High

The flop was 111 (YI), based in Shanghai. The IPO lost 20 cents on its opening day. 111 gives its consumers access to pharmaceutical products and medical services directly through its online retail pharmacy, indirectly through its offline pharmacy network and through its Internet hospital. The company priced 7.175 million American Depositary Shares (ADS) on Tuesday evening at $14 each; the deal’s size had been cut from 9.3 million shares at $14 to $16 each. On Wednesday, 111 opened at $16.75 and closed its opening day at $13.80, down 20 cents from its IPO price. It finished the week at $13.99.

The pop was Principia Biopharma (PRNB). The IPO gained 92.1 percent on its opening day. Principia Biopharma is a clinical-stage biopharmaceutical company dedicated to bringing transformative oral therapies to patients with significant unmet medical needs in immunology and oncology. The company priced 6.25 million shares on Thursday evening at $17 each, up from 4.687 million shares at $15 to $17 each. Principia opened Friday at $25.66 and closed its opening day at $32.65 – up 92.1 percent from its offering price.

The moonshot was Qutoutiao (QTT), based in Shanghai. The IPO gained 128.1 percent on its opening day. Quotoutiao says it is the No. 2 mobile content aggregator in China in terms of MAUs (monthly active users) and average DAUs (daily active users) in July 2018, according to the Analysys Report. The company priced 12 million ADS on Thursday evening at $7 each, down from 16 million ADS at $7 to $9 each. It opened Friday at $9.10 and closed its opening day at $15.97 – up a whopping 128.1 percent from its IPO price. Note: An IPO that closes it opening day with a gain of 100 percent or more is classified as a “moonshot.”

For the record: The first moonshot was recorded on Oct. 14, 1980, according to available reports. It was Genentech (GNE) – priced at $35 – and closed its opening day at $71.25 – up 103.6 percent. Since Oct. 14, 1980, there have been 269 moonshots among a total of 12,754 IPOs priced over the past 38 years.

Now back to the present. This week’s IPO Calendar has eight deals looking to raise a total of $3.3 billion.

Let’s take a look at this week’s IPO traffic, organized by pricing and trading dates.

Wednesday evening for Thursday morning:

Bank7 (BSVN proposed), based in Oklahoma City, is a bank holding company. Through its wholly owned subsidiary, Bank7 operates seven full-service branches in Oklahoma, the Dallas/Fort Worth metropolitan area and Kansas.

X Financial (XYF proposed), based in Shenzhen, China, is a technology-driven personal finance company focusing on serving China’s underserved prime borrowers and mass affluent investors.

Thursday evening for Friday morning:

Elanco Animal Health (ELAN proposed), based in Greenfield, Indiana, is the fourth-largest animal health company in the world. The company develops, manufactures and markets products for companion and food animals.

Eventbrite (EB proposed}, based in San Francisco, is an event management and ticketing website. The service lets users browse, create and promote local events. It allows event organizers to offer online ticketing services for their events.

Farfetch (FTCH proposed), based in London, says it is the leading technology platform for global luxury fashion. In February, Farfetch announced a multi-year partnership with Chanel, the prospectus says.

Remora Royalties (RRI proposed), based in Austin, Texas, is a growth-oriented Delaware company formed to own and acquire overriding royalty, mineral and royalty interests in oil and natural gas properties. Note: For the 12-month period ending Sept. 30, 2019, the company forecasts that it expects to pay a dividend of $2.25 per share of Class A common stock, the prospectus says.

Y-mAbs Therapeutics (YMAB proposed), based in New York City, is a late-stage clinical biopharmaceutical company focused on the development and commercialization of novel antibody-based therapeutic products to treat cancer. Note: Insiders have indicated interest in buying $30 million worth of the $80 million IPO.

Zekelman Industries (ZEK proposed), based in Chicago, is a North American manufacturer of industrial steel pipe and tube products with over 100 years of operating experience.

(For more information about these companies on the IPO calendar, please check the profiles found on the website.)

September’s Final Week

There are six IPOs on tap for the week of Sept. 24th. But anything can happen when the U. S. Securities and Exchange Commission’s filing window opens for business again on Monday morning, Sept. 17.

Stay tuned.

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