The IPO Buzz: Back to Business

The eyes and the ears of the world were glued to the U.S. presidential election results last week – and all got a big surprise. The Trump train steamrolled the country. Nearly a week later, we still don’t know much other than the wall will be built; talk about deportation of immigrants will continue, and cheers sounded from Moscow.

But Wall Street seems relieved that the uncertainty over the election’s outcome is gone.

The IPO market is slowly coming back to life – with two deals on this week’s calendar and one on tap the following week. (More details on that later.)

It takes a healthy stock market, of course, to pave the way for a solid IPO market. The U.S. stock market rallied after Donald J. Trump was elected president. The Dow Jones Industrial Average closed on Friday, Nov. 11, 2016, at a record high, wrapping up its best week since 2011 with a gain of 5.4 percent. The Standard & Poor’s 500 Index and the NASDAQ Composite Index also finished the week in the plus column – with each up 3.8 percent for the week.

Republicans, Democrats and Stocks

Here are some numbers worth noting: The S&P 500 registered an average annual gain of 11.46 percent for every year running from the inauguration of Dwight D. Eisenhower as president on Jan. 20, 1953, when the index closed at 26.14, through the S&P 500’s close on Friday, Nov. 11, 2016, at 2,164.45.

Passing note of interest: The Republicans held the presidency for 36 years during that span of more than 63 years and the S&P 500 was up 9.86 percent per year. The Democrats held the office for 28 years during that stretch of a little over 63 years – and the S&P 500 was up 16.7 percent per year.

(Note: Jan. 20 date is the date of the U.S. presidential inauguration. The S&P 500 was created in 1923 as the Composite Index. It was expanded to 500 stocks in 1957.)

Pest Control and a Blank Check

Now on to the present and today’s IPO market. The calendar typically dries up for Election Day – and this year, that was indeed the case. What’s more, last week included a federal holiday. The U.S. Securities and Exchange Commission was closed on Friday, Nov. 11th, which was Veterans Day.

Behind the scenes, though, the action started to heat up. This week there are two names on the calendar and another deal is scheduled for the following week. The names to note this week are:

  • SenesTech (SNES –proposed) specializes in proprietary technology to manage animal pest populations through fertility control. Its first product candidate is designed to control rat populations by making it impossible for rodents to reproduce. The deal has been on the calendar for a couple of weeks.
  • Eagleline Acquisition (IGLEU – proposed) is a newly organized “blank check” company incorporated in Delaware on May 9, 2016, and formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. Its initial focus will include ways to provide better and more efficient care for the elderly.

Medical Pot Vs. Sweet Potatoes

Looking ahead to the week of Nov. 21, which will be cut short by the Thanksgiving Day holiday, the IPO Calendar has an interesting name on it. Innovative Industrial Properties (IIPR – proposed) is focused on the acquisition, ownership and management of specialized industrial properties leased to experienced state-licensed operators for their regulated medical-use cannabis facilities. So Wall Street’s attention next week will be focused on pot – in this case, medical marijuana. That’s in contrast to the Thanksgiving holiday menus, which often feature sweet potatoes along with the traditional turkey, stuffing and cranberry sauce.

But anything could happen on Monday morning, when the U.S. Securities and Exchange Commission’s filing window re-opens for business.

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.