The IPO Buzz: A Peek at the Silver Lining

Most investors will remember late October for the stock market’s sharp selloff last week, but there was a silver lining tucked inside some of those clouds of gloom. There was a change in the wordage of a few final prospectuses. Before getting into that, let’s take a quick look at what happened at the corner of Broad and Wall Streets.

The Dow Jones Industrial Average lost 2.97 percent last week, while the S&P 500 Index dropped 3.94 percent and the NASDAQ Composite Index slid 3.78 percent.

Now let’s turn to interesting reading from the final prospectuses for Pintec Technology Holdings (PT), StoneCo Ltd (STNE) and YETI Holdings (YETI).

Pintec, a Chinese online platform operator of financial services offering wealth management and insurance brokerage services, priced its IPO of 3.725 million American Depositary Shares (ADS) at $11.88 each on Wednesday evening. On Thursday, Oct. 25, 2018, Pintec opened at $14.35 and closed at $12.49. At the close, the stock was up 5 percent from its IPO price.

From the final prospectus: Certain shareholders were allocated 2.25 million ADS and business partners and investors were allocated 1.68 million ADS. That adds up to about 3.93 million ADS on an offering of 3.725 million ADS. That hurt the opening day’s trading because nobody got much stock. The IPO traded only 172,766 shares for a turnover ratio of 4.6 percent versus a 2018 turnover ratio of 44.2 percent of all IPOs.

StoneCo is a provider of financial technology solutions that empower merchants and integrated partners to conduct electronic commerce seamlessly across in-store, online, and mobile channels in Brazil. On Wednesday evening, Oct. 24, StoneCo priced its IPO of 50.7 million shares at $24 each – UP from 47.7 million shares at $21 to $23 each. On Thursday, the stock opened at $32 and closed at $31.35. StoneCo jumped more than 30 percent from its IPO price on its first day of trading.

From the final prospectus: Berkshire Hathaway purchased 14.17 million shares, T. Rowe Price Associates purchased 9 million shares, and Madrone Partners purchased 2.75 million shares. That amounted to 51.1 percent of the deal. The stock that went to the private investors helped the IPO pop for an opening-day gain of 30.6 percent.

YETI Holdings designs, makes and sells premium products such as insulated coolers and cups for the outdoor and recreation market. YETI priced its IPO of 16 million shares at $18 each, DOWN from 20 million shares at $19 to $21 each. On Thursday, Oct. 25, YETI opened at $16.75 and closed at $17, down 5.6 percent from its IPO price.

From the final prospectus: The company offered 2.5 million shares and insiders offered 13.5 million shares. Insiders cut their original offering from 17.5 million shares. Judging by its tape action, the cut by the insiders was not enough.

Health-care IPOs On Tap

Armed with the knowledge from the changes in some of last week’s prospectuses, let’s take a look at this week’s IPO traffic. As the week unfolds, let’s keep an eye open for any new wrinkles.

This week’s IPO Calendar lists eight deals, aiming to raise $508 million. But several are small-cap deals and carryovers from previous weeks. So let’s skip those and center on these three new faces at the IPO racetrack.

In the wings are Axonics Modulation Technologies (AXNX proposed), Orchard Rx (ORTX proposed) and Twist Biosciences (TWST proposed).

Axonics Modulation(AXNX proposed), based in Irvine, California, is a medical technology company focused on the design, development and commercialization of innovative and minimally invasive sacral neuromodulation(SNM)solutions to treat patients with overactive bladder, fecal incontinence and urinary retention. The Axonics IPO is scheduled to be priced on Wednesday evening, Oct. 31st, to trade Thursday morning, Nov. 1st, on NASDAQ.

Orchard Rx(ORTX proposed), based in London, is a commercial-stage biopharmaceutical company dedicated to transforming the lives of patients with life-threatening rare diseases through autologous ex vivo gene therapies. This IPO is set for pricing on Tuesday evening, Oct. 30th, to trade Wednesday morning, Oct. 31st, on NASDAQ.

Twist Biosciences(TWST proposed), based in San Francisco, is a leading and rapidly growing synthetic biology company that has developed a disruptive DNA synthesis platform. The company says it is pioneering a new method of manufacturing synthetic DNA by “writing” DNA on a silicon chip. This IPO is expected to be priced Tuesday evening, Oct. 30th, to trade Wednesday morning, Oct. 31st, on NASDAQ.

(For more information, check the company profiles by clicking on the individual company’s name on the IPO Calendar on the website.)

November’s Blank Slate

The IPO Calendar is clean and green for November, but anything can happen when the U.S. Securities and Exchange Commission’s filing window opens again for business on Monday.

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.