The IPO Buzz: Eyes on Asia

The eyes of the IPO market are on Asia this week and there is a tweak from the past. The calendar for the week of Oct. 16 shows four IPOs and all, according to the IPO experts, are reportedly “hot issues.” Three offerings are from the Far East.

Nevertheless, some IPO services are reporting up to six deals on the calendar. Two of these offerings are what Wall Street professionals call “non-IPOs,” but more on those in a minute.

Mandarin Not Required

The burning question is: “What makes the Chinese IPOs so ‘hot’ in today’s market?” In a word or two: The tape. The good old-fashioned Wall Street ticker tape.

This year, six Chinese IPOs have made debuts in the U.S. capital market, according to the U.S. Securities and Exchange Commission. As of Friday’s close, on Oct. 13, 2017, five finished above their IPO prices, while one was a loser. The average gain for all six was 89.3 percent. Excluding the single loser, the average aftermarket gain for the five winners was 118 percent – that’s an “average gain” – and that’s what puts the Chinese IPOs in play.

Data, Credit, Tutoring and Games

This week’s calendar lists four names that expect to raise over $1.8 billion. Here is what IPO investors can look for: MongoDB (MDB – proposed), from this side of the Atlantic, and from Asia – Qudian (QD – proposed), RISE Education Cayman (REDU – proposed) and Sea Limited (SE – proposed).

MongoDB, based in New York City, is a database platform, built to run applications in the cloud, on premises or in a hybrid environment. The platform is offered under a software subscription business model. The platform enables retail, financial, media and healthcare companies to use their data with greater speed and flexibility.

Qudian, based in Beijing, offers online credit products using big data-enabled technologies to transform the consumer finance experience in China. The company services hundreds of millions of quality, unserved or underserved consumers – mostly young mobile-active consumers – in China.

RISE Education Cayman, based in Beijing, operates in China’s junior ELT market. The company offers after-school English teaching and tutoring services provided by training institutions to students ages 3 to 18. RISE is a leader in China’s junior ELT market, according to Frost & Sullivan.

Note: Of the 11 million American Depositary Shares (ADS) being offered, the company is selling 5 million shares and insiders are selling 6 million shares.

Sea Limited, based in Singapore, is a platform that offers online gaming, online shopping and digital payment services localized to meet the unique characteristics of the seven countries in Greater Southeast Asia (GSEA): Indonesia, Taiwan, Vietnam, Thailand, the Philippines, Malaysia and Singapore.

(For more information about these companies, please check the IPO profiles found on IPOScoop.com’s website.)

Music and Motorcycles

As mentioned earlier, some IPO services are presenting another two deals on this week’s calendar as “IPOs.” But these offerings are not IPOs, when held up against the yardstick that Wall Street’s professionals use. Why not? The answer: Read the prospectus. The deals are LiveXLive Media and RumbleOn.

LiveXLive Media, based in Beverly Hills, California, is one of the world’s premium internet networks devoted to live music such as the Rock in Rio Festival and live streaming Rihanna and Katy Perry in concert as well as music-related video content.

Page 34 of its prospectus states: “Our common stock has been quoted on the OTC Pink marketplace under the symbol “LIVX” since July 24, 2015.”

RumbleOn, based in Charlotte, North Carolina, operates a capital-light disruptive e-commerce platform to help consumers and dealers buy-sell-trade-finance pre-owned motorcycles and other power sport and recreation vehicles, or power/recreation vehicles, in one online location. The company’s initial focus is  the market for pre-owned Harley Davidsons.

The cover page of its prospectus states: “Our shares of Class B Common Stock are currently quoted on the OTCQB marketplace.”

October’s Tide Still Rising

For the week of Oct. 23, 2017, the IPO calendar lists two deals expecting to raise about $800 million. However, when the SEC opens its filing window again on Monday morning, anything can happen.

Stay tuned.

Disclosure: Neither the author nor anyone else on the IPOScoop.com staff has a position in any stocks mentioned, nor do we trade or invest in IPOs. The author and IPOScoop.com staff do not issue advice, recommendations or opinion.