The IPO Buzz: Big Week after the Slide

Wall Street is planning on offering an ambitious IPO calendar in the wake of last week’s sharp stock market selloff. The Nasdaq Composite Index lost 3.74 percent. Bankers plan to price 10 deals looking to raise $1.87 billion, but investors’ interest is said to have backed off a little due to market conditions.

The Nasdaq closed Friday, Oct. 12, 2018, at 7,496.89, down 7.56 percent from its previous closing high of 8,109.69 on Aug. 29, 2018. Note: The Nasdaq has been called the barometer of the IPO market. At one time, most of the IPOs were technology companies going public, much like the composition of the Nasdaq.

On Thursday, Oct. 11, the Nasdaq slipped into correction mode, falling as low as 7,274.04, down 10.3 percent from its close of 8,109.69 on Aug, 29, 2018. Then it escaped those cold fingers to close at 7,496.89. But that was not the end of the world. There was some good news. Consider the following:

“Mitch on The Markets, Markets insight from Mitch Zack,” reported on Oct. 13: “Steep drops in the stock market are scary, I get that. But, they’re also fairly routine and characteristic of normal market corrections, and do not necessarily signal bear markets. In fact, I would argue that they rarely do, since bear markets tend to start with rolling tops – not steep, scary declines. I see the current market action as a par-for-the-course pullback, nothing more.”

Sailing in Rough Waters

Let’s take two of last week’s favorite IPOs. Both did well in the aftermath of a choppy stock market:

Allogene Therapeutics (ALLO), a clinical stage immune-oncology company, priced its IPO of 18 million shares at $18 each and the IPO closed the week at $26.81, UP 48.9 percent above its IPO price.

Anaplan (PLAN), a pioneer in the category of Connected Planning, priced its IPO of 15.5 million shares at $17 each and the IPO closed the week at $24.30, UP 42.9 percent above its IPO price.

So it might not be the end for the 2018 IPO market.

Nine new faces are featured on this week’s IPO Calendar. One – YayYo – is a small-cap deal carried over from last week.

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

Monday evening for Tuesday morning trading:

Graf Industrial (GRAF.U proposed), based in Houston, is a newly organized blank check company focused on potential acquisitions or business combinations with companies in the industrial sector, specifically diversified industrial manufacturing, technology, distribution and service businesses in the United States and Canada with an aggregate enterprise value of over $1 billion.

Tuesday evening for Wednesday morning trading:

Riley Exploration Permian (REPX proposed), based in Oklahoma City, is an oil and natural gas company focused on growing its reserves, production and cash flow through the acquisition, exploration, development and production of oil, natural gas and natural gas liquids and reserves in the Permian Basin.

Wednesday evening for Thursday morning trading:

PhaseBio Pharmaceuticals (PHAS proposed), based in Malvern, Pennsylvania, is a clinical-stage biopharmaceutical company focused on the development and commercialization of novel therapies to treat orphan diseases, with an initial focus on cardiopulmonary indications. Note: Insiders are in for $25 million, or 38.5 percent, of the $65 million IPO.

SI-BONE (SIBN proposed), based in Santa Clara, California, is a medical device company that has pioneered a proprietary minimally invasive surgical implant system to fuse the sacroiliac joint to treat sacroiliac joint dysfunction that often causes severe lower back pain. Note: Insiders are in for $32 million, or 38 percent, of the $84 million IPO.

Studio City International Holdings (MSC proposed), based in Hong Kong, is a world-class gaming, retail and entertainment resort located in Cotai, Macau. Studio City Casino has 250 mass market gaming tables and approximately 970 gaming machines. Note: MCE Cotai Investments Limited, the controlling shareholder, and certain affiliates of New Cotai, one of our principal shareholders, have indicated an interest in buying up to 25,550,000 American Depositary Shares (ADS) or 88.9 percent of the total amount of ADSs representing SC Class A Shares being offered in this IPO.

Valtech SE (VTEC proposed), based in London, is a  next-generation business transformation services provider focused on helping medium and large organizations as they embrace the digital age. The company provides a streamlined portfolio of integrated offerings, encompassing strategy, design, technology and marketing.

Thursday evening for Friday morning trading:

LogicBio Therapeutics (LOGC proposed), based in Cambridge, Massachusetts, is a genome editing company focused on developing medicines to durably treat rare diseases in patients with significant unmet medical need using GeneRide, its proprietary technology platform. Note: Insiders are in for $30 million, or 40 percent, of the $75 million offering.

Niu Technologies (NIU proposed), based in Beijing, designs, manufactures and sells high-performance smart e-scooters. Niu is also the largest lithium-ion battery-powered e-scooter company in China and a leader in Europe in terms of sales volume in 2017, according to CIC. Note: Insiders are in for $10 million, or 10.5 percent, of the $95.5 million offering.

SolarWinds (SWI proposed), based in Austin, Texas, is a provider of information technology infrastructure management software. The company’s products give organizations worldwide, regardless of type, size or IT infrastructure complexity, the power to monitor and manage the performance of their IT environments, whether on-premise, in the cloud, or in hybrid models. Note: The company is selling 17 million shares and insiders are selling 25 million shares.

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

October’s Fourth Week

The IPO Calendar has one–small cap deal on it for the week of Oct. 22nd. The company aims to raise $35 million.

But more names could land on the IPO Calendar after the SEC’s filing window opens for business again on Monday morning, Oct. 15th.

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.