The IPO Buzz: December’s Train Right On Time

December’s IPO Train is pulling into the Wall Street Depot on time this year. This week’s IPO Calendar now lists six deals expected to raise slightly over $1 billion, but more on that in a minute.

A check of recent IPO traffic confirms the story. For the month of December alone in 2013 through 2017, a total of 44 IPOs were priced, according to the U.S. Securities and Exchange Commission filings. That was an average of about nine IPOs per December. Most of the deals were priced during the first week of December – much like what we’re seeing in 2018.

Mourning a President

This week’s wild card is Wall Street’s four-day work week. The U.S. stock market will be closed on Wednesday, Dec. 5th, for a national day of mourning for President George H.W. Bush, who died late on Friday, Nov. 30th. The funeral for the 41st U.S. president will be held on Wednesday at the Washington National Cathedral.

The pricing and trading dates for two deals – MOGU and DiaMedica Therapeutics – are likely to be affected by the stock market’s closure on Wednesday. MOGU had been set for pricing Tuesday night to trade on Wednesday morning. DiaMedica had been set for pricing Wednesday night to trade on Thursday morning.

Please check’s IPO Calendar on Monday for the updated pricing dates.

MOGU (MOGU proposed), based in Hangzhou, China, is a leading online fashion and lifestyle destination in China. The company caters to China’s millennials, who were born in the years 1981 to 1996. They access MOGU’s platform mostly through its mobile app called Moguje, according to the prospectus.

DiaMedica Therapeutics (DMAC proposed), based in Minneapolis, is a clinical stage biopharmaceutical company primarily focusing on developing synthetic human proteins to treat acute ischemic stroke and chronic kidney disease.

Checking the Fine Print

As we have seen in recent weeks, just because a deal is listed on the calendar as an “IPO,” that may not actually be the case.

One common problem: People tend to read just the first few words of the prospectus and then skip the rest. That’s a big mistake.

To find out whether a deal is indeed an IPO, you must read further into the prospectus. In other words, keep reading the fine print.

DiaMedica Therapeutics is a case in point. Here are the opening words on the prospectus cover: “This is the initial public offering of common shares of DiaMedica Therapeutics Inc. in the United States.”

But if you read deeper into the first paragraph: “Although this is our initial public offering of our common shares in the United States, our common shares trade in Canada on the TSX Venture Exchange under the symbol “DMA” and over-the-counter in the United States on the OTCQB marketplace under the symbol “DMCAD.”  The last reported sale price of our common shares at the close of business on November 27, 2018, on the TSX Venture Exchange was CAD$5.60 per share (US $4.21) and over-the-counter in the United States as quoted by the OTCQB marketplace was $4.22 per share.”

On Friday, Nov. 30, 2018, the last price found under the symbol “DMCAD” was $4.73.

Next case in point of a non-IPO on this week’s IPO Calendar:

Mercantil Bank Holding, based in Coral Gables, Florida, is a bank holding company.

Here are the opening words on the prospectus cover: “This is the initial public offering of Mercantil Bank Holding Corporation’s Class A common stock, which we refer to as the Offering.”

Check out the end of the third paragraph: “Our Class A common stock and our Class B common stock are listed on the Nasdaq Global Select Market under the trading symbols “AMTB” and “AMTBB,” respectively. On November 23, 2018, the last reported sales price of our Class A common stock was $15.27 per share.”

On Friday, Nov. 30, 2018, the last price found under the symbol “AMTB” was $16.

Wrapping Up the Week

This brings us to the rest of this week’s IPO Calendar. Three IPOs are set for pricing at the end of the week.

Thursday evening pricing for Friday morning trading

Moderna (MRNA proposed), based in Cambridge, Massachusetts, is a biotechnology company focusing on drug discovery and drug development based on messenger RNA (mRNA). The company creates synthetic mRNA that can be injected into patients to help them produce proteins to prevent, treat or cure disease, including certain types of cancer and rare genetic illnesses.

Synthorx (THOR proposed), based in La Jolla, California, is a biotechnology company focusing on protein therapeutics. The company’s lead product candidate is THOR-707, a variant of IL-2 that is in development in various tumor types as a single agent and in combination with an immune checkpoint inhibitor. The goal is to develop treatments for cancer and autoimmune disorders.

Schultze Special Purpose Acquisition  (SAMAU proposed), based in Rye Brook, New York, is a blank check company focusing on companies that have completed and emerged from a financial restructuring, which may have included a Chapter 11 bankruptcy court protection filing.

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

Looking at Mid-December

For the week of Dec. 10th, the IPO Calendar has two blank check companies on tap. But anything can happen when the SEC’s filing window opens again for business on Monday morning.

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.