The IPO Buzz: Another Bull in the Ring

The NASDAQ Composite Index surged 6.1 percent last week to close at 8,650.14, joining the Dow and the S&P 500 in bull market territory. All this blows some wind into Wall Street’s sails – and there is an IPO on the calendar this week. There’s also a stockholders’ vote this week on the DraftKings deal, which some are calling an IPO, although it’s not. (We’ll have more on these deals in a minute.)

Let’s take a look at Friday’s close on April 17, 2020:

  • The NASDAQ Composite Index closed at a recovery high of 8,650.14, up 26.08 percent from 6,860.67, its recent closing low on March 23.
  • The Dow Jones Industrial Average closed at a recovery high of 24,242.49, up 30.39 percent from 18,591.93, its recent closing low on March 23.
  • The S&P 500 closed at a recovery high of 2,874.57, up 28.48 percent from 2,237.40, its recent closing low on March 23.

So the bulls have knocked out the bears. Just three weeks ago, the bears were clawing their way through Wall Street.

But what’s a bull market without an IPO Calendar?

Chinese Education IPO

This week there’s one small-cap Chinese deal that is expected to trade Friday morning, April 24. The IPO is China Liberal Education Holdings (CLEU proposed). The company plans to offer 1.33 million ordinary shares at $6 each to raise $7.99 million, according to its final prospectus dated March 31, 2020.

China Liberal Education Holdings, based in Beijing, is an educational service provider operating under the “China Liberal” brand. The company says it provides students with the tools to excel in a global environment. It offers a wide variety of educational services and products intended to address the needs of its partnering schools and its students.

And how well have China’s IPOs performed?

According to’s 2020 Pricings, the bull market has not come to Chinese IPOs offered in the U.S. capital markets. For the year to date, six China-based IPOs have been priced. The scorecard showed all six were trading below their IPO prices and the average loss for all was 28.9 percent.

Nevertheless, 2020 is still young, and tomorrow is another day.

DraftKings Debut

DraftKings, the fantasy sports betting company, is expected to go public this week through a reverse merger with Diamond Eagle Acquisition Corp., a “blank check” company, and SBTech, a gaming tech company. The three-way merger, outlined in a deal announced in December, will value the new company at about $3 billion, according to the prospectus. The U.S. Securities and Exchange Commission declared the registration statement effective on April 15th, DraftKings Chief Financial Officer Jason Park told Bloomberg News in an email last week.

Diamond Eagle has scheduled a virtual stockholders’ meeting for Thursday, April 23, for a vote on the three-way merger. The company postponed an earlier meeting because of the coronavirus pandemic. Diamond Eagle (DEAC) is a special-purpose acquisition company – also known as a SPAC – that went public last May.

The new company will be renamed DraftKings, Inc. (DKNG proposed). This is a NASDAQ listing.

April’s Fourth Week

This brings us to the week of April 27th    and the IPO Calendar is blank so far. But some players could climb onto the IPO Calendar when the SEC’s filing window opens again for business on Monday, April 20th.

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.