This week’s trip through the IPO Valley takes a different route. The calendar lists four deals – one “blank check” and three technology companies. That’s right – three are technology IPOs. Over the last couple of years, the energy and the health-care sectors have led the parade, but this week returns to yesteryear. Technology is back in town, at least for now.
During the Internet IPO heyday from 1999 through the spring of 2000, about 65 percent to 70 percent of the weekly calendar was technology, according to the U.S. Securities and Exchange Commission filings. Most companies had no revenues, but they did have high hopes, and there was big investor demand for those IPOs. Almost none of the companies had the financials to qualify for a New York Stock Exchange listing. Their shares were traded on the NASDAQ Global Market. As a result, the NASDAQ Composite Index became the barometer of the IPO market. Then things changed.
Over the last couple of years, the energy and health-care IPOs became more dominant on the calendar, and technology IPOs dried up. There is nothing like the numbers to tell the story. Let’s look at the NASDAQ Composite Index. It closed on Friday, May 19, 2017, at 6,083.70, UP 52.2 percent from 3,996.96, its most recent low set on Feb. 3, 2014. Since then, the IPO traffic has tilted in favor of energy and health care. Consider:
In 2014, 116 energy and health-care IPOs were priced versus 42 technology deals.
In 2015, 64 energy and health-care IPOs were priced versus 21 technology deals.
In 2016, 17 energy and health-care IPOs were priced versus 7 technology deals.
But don’t give up on technology.
March of the VCs
The venture capitalists (VCs) with their checkbooks found their way to Silicon Valley and a bidding war developed. In that climate, start-up tech companies did not have to go public to get financing. The VCs came knock, knock, knocking on their doors.
In time, the VCs will want something to show for their investments – and voila! The IPO calendar is the answer. This might be an interesting trend in the future.
Tech on Center Stage
Now let’s flip back to this week and the three technology IPOs. The names are: Appian (APPN – proposed); SMART Global Holdings (SGH – proposed) and WideOpenWest (WOW – proposed).
Appian, based in Reston, Virginia, is a provider of a low-code software development platform that enables organizations to develop powerful and unique applications. The company’s customers have used applications built on their low-code platforms to launch new business lines, automate vital employee workflows, manage complex trading platforms, accelerate drug development and build global procurement systems.
Bankers plan to offer 6.25 million shares at $11 to $13 each on Wednesday evening, May 24, to trade Thursday, May 25, on the NASDAQ Global Market.
SMART Global Holdings, based in Newark, California, is a provider of specialty memory solutions for the electronics industry. In Brazil, it believes it is the largest in-country manufacturer of memory for desktops, notebooks and servers, as well as mobile memory for smartphones. SMART Global has over 250 end customers, such as Cisco, Samsung, Hewlett-Packard Enterprises (HPE), Dell and LG, according to its prospectus.
Bankers plan to offer 5.3 million shares at $13 to $15 each on Wednesday evening, May 24, to trade Thursday, May 25, on the NASDAQ Global Market.
WideOpenWest, based in Englewood, Colorado, believes it is the sixth-largest cable operator in the United States. The company provides Internet, cloud and cable television and voice-over-IP-based telephony services. WideOpenWest’s services reach 19 markets consisting of over 300 communities in the states of Alabama, Florida, Georgia, Illinois, Indiana, Maryland, Michigan, Ohio, South Carolina and Tennessee.
Bankers plan to offer about 19 million shares at $20 to $22 each on Wednesday evening, May 24, to trade Thursday, May 25, on the New York Stock Exchange.
(For more information, please check the IPO profiles found on IPOScoop.com’s website.)
May’s Final Days
This brings us to the week of May 29 and the calendar is clean and green. But that could change on Monday morning when the SEC’s filing window re-opens for business.
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.