The IPO Buzz: Hitting the Gas

The IPO Calendar for the week of June 8th shows two deals looking to raise $552 million, but one – Vroom (VRM proposed) – has already increased its price range and accelerated its pricing date. That IPO hit the gas pedal before last week’s IPO market had even been put to bed. (We’ll have more on this in a minute.)

Late Friday afternoon, another IPO was added: This was Burning Rock Biotech (BNR proposed), bringing the coming week’s IPO Calendar to two deals. Talk swirled around Wall Street that as many as five more names could be added on Monday morning, June 8th, when the U.S. Securities and Exchange Commission’s filing window opens again for business.

In last week’s whirlwind, 10 IPOs raised $4.6 billion and took off in the aftermarket. They started trading with an average opening gain of 39.1 percent above their IPO prices. When magic like this happens, things can pop.

In that heady atmosphere, 19 companies updated their IPO filings and eight companies filed to go public last week.

Now let’s take a look at the pair of deals on this week’s IPO Calendar, organized by pricing and trading dates.

Monday evening pricing for Tuesday trading:

Vroom, based in New York City, is an end-to-end e-commerce platform that describes itself as “transforming the used vehicle industry by offering a better way to buy and a better way to sell used vehicles,” according to the prospectus.

On June 1, the company posted offering terms to price 18.75 million shares at $15 to $17 each. Initially, the IPO was scheduled to be priced Wednesday evening for Thursday’s trading.

On Friday morning, Vroom’s price range was increased to $18 to $20 on 18.75 million shares, and the pricing was accelerated to Monday evening to trade Tuesday morning.

Vroom reported revenue of $1.33 billion for the trailing 12 months that ended March 31, 2020. For the full calendar year that ended Dec. 31, 2019, Vroom reported revenue of $1.19 billion.

In the prospectus, Vroom said “we have not been profitable since our inception in 2012 and had an accumulated deficit of approximately $616.1 million as of March 31, 2020. We expect to incur additional losses in the future.”

But what people are talking about is Carvana (CVNA).

On April 27, 2017, Carvana went public at $15. Recently Carvana sold at an intraday low of $22.16 on March 19, 2020. On Friday, June 5th, Carvana closed at $115.87, up 422.9 percent in less than three months.

TTM (Trailing 12 months) Comparison

Carvana reported revenue of $4.29 billion and a net loss of $465.6 million for the trailing 12 months ended March 31, 2020.

Vroom reported revenue of $1.33 billion and a net loss of $271.7 million for the trailing 12 months ended March 31, 2020.

Thursday evening pricing for Friday trading:

Burning Rock Biotech, based in Guangzhou, is a Chinese biotech company that aims to transform precision oncology and early cancer detection.

Note: Insiders and other investors have indicated an interest in buying up to $79 million, or 40.4 percent, of the IPO.

Burning Rock Biotech plans to offer 13.5 million American Depositary Shares at $13.50 to $15.50 each.

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

Third Week of June

This brings us to the week of June 15th and the IPO Calendar is blank so far. But some names could climb onto next week’s IPO Calendar – and more could line up on this week’s runway – when the SEC’s filing window opens again for business on Monday, June 8th.

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.