The IPO Buzz: Flipping On the IPO Lights

Wall Street’s IPO Business: The Worst in 20 Years – That headline splashed across the page in The Wall Street Journal on Sept. 22, 2016. The reporter produced a slew of statistics to support that headline. But not to worry: There is a good side to this story.

The good news is this: Negative stories start surfacing at the bottom of a cycle. So just when the headlines proclaim that it’s dark out there, something else is usually going on behind the scenes on Wall Street: Bankers and their corporate clients are getting ready to flip the IPO lights back on.

For the IPO market, the pot started to bubble just a couple of weeks ago. Let’s look at the trend:

  • On Monday, Sept. 12, 2016, three IPOs appeared on that week’s calendar and all were priced. The fourth name on that week’s calendar belonged to a Bermuda bank offering stock in the United States for the first time; its stock, however, had traded for years on the Bermuda Stock Exchange.
  • Last week, on Monday, Sept. 19, 2016, a total of nine names appeared on the IPO calendar – and eight of those deals got done. The other one was postponed.
  • This week, on Monday, Sept. 26, another four IPOs are scheduled.
  • There is another bright spot in this story. For the 11 IPOs that have been priced so far in September 2016, the average opening-day gain was over 30 percent.

All told, bankers are starting to usher deals out the door.

An Autumn Quartet

The names of the four IPOs that bankers plan to price this week – the first full week of autumn – are: Fulgent Genetics (FLGT – proposed), Nutanix (NTNX – proposed), Tabula Rasa HealthCare (TRHC – proposed) and MedEquities Realty Trust (MRT – proposed).

Fulgent Genetics, based in Temple City, California, is a technology company focused on providing genetic testing services to physicians with clinically actionable diagnostic information. It intends to provide tests to hospitals and medical institutions. The company offers tests for more than 7,500 genetic conditions, including various types of cancer as well as cardiovascular diseases and neurological disorders.

Bankers plan to offer 4.6 million shares of Fulgent Genetics at $12 to $14 each on Tuesday, Sept. 27, to trade Wednesday, Sept. 28.

Nutanix, based in San Jose, California, delivers an enterprise cloud platform “that converges traditional silos of server, virtualization and storage into one integrated solution,” according to its prospectus. The company says that the world’s most advanced enterprise data centers rely on Nutanix technology to power their mission-critical workloads at any scale.

Bankers plan to offer 14 million shares of Nutanix at $11 to $13 each on Thursday, Sept. 29, to trade Friday, Sept. 30.

Tabula Rasa HealthCare, based in Moorestown, New Jersey, offers medication risk-management services to doctors and healthcare organizations using its Medication Risk Mitigation Matrix™. Tabula Rasa’s cloud-based software solutions and proprietary technology platform help healthcare providers prevent adverse drug reactions, improve patients’ health and lower the cost of care, according to the prospectus. These patients include people age 65 and up – many on five or more prescription drugs a day for chronic health conditions – and people on medication for severe mental illness.

Bankers plan to offer 4.3 million shares of Tabula Rasa HealthCare at $13 to $15 each on Wednesday, Sept. 28, to trade Thursday, Sept. 29.

MedEquities Realty Trust, based in Nashville, Tennessee, is a real estate investment trust (REIT) with a portfolio of 21 healthcare facilities, including two long-term acute care hospitals and 15 skilled nursing facilities.

Bankers plan to offer 19.9 million shares of MedEquities Realty Trust at $12 to $14 each on Wednesday, Sept. 28, to trade Thursday, Sept. 29.

Looking into the week of Oct. 2, 2016, the calendar has three IPOs. But anything could happen on Monday morning, which could set the stage for the following week.

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.