The IPO Buzz: October’s Grand Finale

October’s IPO market is warming up for a grand finale this week.  Bankers expect to raise $2.6 billion. A closely watched cloud company and a billion-dollar baby from China are part of the mix.

If every deal gets out the door, this will be the busiest week of the year for the IPO market.

BlackLine (BL – proposed) is attracting a lot of interest. The company specializes in a cloud-based software platform for accounting and finance – more on this later.

ZTO Express (ZTO – proposed), which some are calling “the FedEx of Asia,” is the other marquee name on this week’s calendar. The IPO is expected to raise about $1.3 billion – more on this later.

Seven IPOs are lined up to launch in the final week of October.  They represent a broad swath of the economy. Besides BlackLine and ZTO Express, this week’s IPO calendar includes Acushnet Holdings (GOLF proposed), which makes Titleist golf balls and other golf equipment; two biopharmas – Myovant Sciences Ltd. (MYOV – proposed) and Ra Pharmaceuticals (RATX – proposed) – plus Quantenna Communications (QTNA – proposed), a WiFi chipmaker and network communications company, and a “blank check” company, GTY Holdings Ltd. (GTYHU – proposed).

As the Wall Street pros know all too well, the prerequisite for a robust IPO calendar is a healthy U.S. stock market. The NASDAQ Composite Index, the barometer of the IPO market, is up 5 percent for the year. The other two major U.S. stock indexes are showing strength across the board. The Dow Jones Industrial Average is up 4.1 percent for the year, as of the close on Friday, Oct. 21, 2016. The Standard & Poor’s 500 Index is up 4.8 percent for 2016 so far.

Worth noting: The IPO market is outperforming the broad market. The 2016 IPO Scorecard shows the average gain for IPOs this year is 32.8 percent.

The Cloud and the Bottom Line

BlackLine, based in Woodland Hills, California, created a cloud-based software platform designed to transform and modernize accounting and finance operations for organizations of all types and sizes. The company’s secure scalable platform supports critical accounting processes such as the financial close, account reconciliation, intercompany accounting and controls assurance.

Bankers plan to offer 8.6 million shares of BlackLine at $13 to $15 each on Thursday evening, Oct. 27, to trade on Friday, Oct. 28 on NASDAQ.

Getting the Goods Fast in China

ZTO Express, based in Shanghai, provides timely and reliable express delivery services to consumers throughout China. The company uses a network of couriers and a fleet of trucks. ZTO Express is regarded by some as “the FedEx of Asia,” but unlike FedEx in the United States, the Chinese company does not provide air transport of packages. ZTO’s customers include Alibaba, which has been called “the Amazon of China.” ZTO Express says it “is proud to be an essential part of the e-commerce infrastructure in China and will continue to fuel its growth in the years to come,” according to the prospectus.

Bankers plan to offer 72.1 million American Depositary Shares (ADS) of ZTO Express at $16.50 to $18.50 each on Wednesday evening, Oct. 26, to trade on Thursday, Oct. 27 on the New Stock Exchange.

Looking Ahead: Big Data in China

China stays in the IPO spotlight, with one deal on the calendar for the week of Oct. 31st. GDS Holdings (GDS – proposed) is an operator of high-performance data centers in China.

Although next week’s IPO calendar has just one deal so far, anything could happen to change the ballgame when the U.S. Securities and Exchange Commission’s filing window opens 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.