Sometimes the mid-point is the sweet seat. Skyward Specialty Insurance Group, Inc. (SKWD) climbed 27.3 percent to close at $19.10 – up $4.10 from its $15.00 IPO price – in its NASDAQ debut on Friday the 13th (Jan. 13, 2023). Volume: 4.17 million shares. The IPO is the first $100-million-plus deal of 2023. Skyward priced its slightly upsized IPO of 8.95 million shares at $15.00 – the mid-point of its $14.00-to-$16.00 range – on Thursday night (Jan. 12, 2023) to raise $134.29 million.
Skyward’s IPO flew into friendly Wall Street skies. The pricing followed Thursday’s powerful stocks rally. Investors scooped up stocks after December CPI data showed that inflation had slowed for the sixth straight month, leading to expectations that the Fed’s next rate increase might be just 25 basis points instead of the 50-basis-point hikes of the past year . Skyward’s first day of trading on Friday came on a day when stocks slipped at the opening and then turned higher, with the Dow closing up 112 points. All three major U.S. stock indexes ended the week with gains of at least 2 percent, as The Wall Street Journal noted. Bloomberg was more explicit about the market’s mood with this headline late Friday: Defiant Bulls Stand Up to Fed With Trillion-Dollar Stock Rally
Skyward’s stock opened Friday at $18.90 – up $3.90 for a 26 percent gain from its $15.00 IPO price – NASDAQ’s records show. Volume on that opening trade at 11:32 a.m. EST on Friday: 771,080 shares. Skyward’s closing price was just 40 cents below its session high at $19.50.
At pricing, Skyward’s IPO was increased by 5.32 percent with the addition of 452,383 shares – all sold by the selling stockholders. The bump upward in size resulted in the IPO bringing in $6.79 million more than expected. The terms in the prospectus were 8.5 million shares at $14.00 to $16.00 to raise $127.5 million, if priced at the mid-point. In the IPO, the final prospectus shows that Skyward offered 4.75 million shares – or 53 percent of the deal – while selling stockholders offered the remaining 47 percent. The company was expected to receive about $71.3 million in IPO proceeds. Skyward will not receive any proceeds from the sale of the selling stockholders’ shares.
Barclays and Keefe, Bruyette & Woods were the lead joint-bookrunners. Piper Sandler, JMP Securities, Truist Securities and Raymond James were joint book-runners. Academy Securities and Siebert Williams Shank were the co-managers.
Skyward’s IPO received a warm reception at launch.
“It’s profitable, it’s insurance, it’s a ‘no brainer,’” one savvy IPO investor said.
Skyward had net income of $20.29 million on revenue of $602.32 million for the 12 months that ended Sept. 30, 2022, according to the prospectus.
The Houston-based company provides commercial property and casualty (“P&C”) products, including commercial auto insurance, as well as general liability, excess liability, professional liability, group accident and health, surety and workers’ compensation insurance, the prospectus says. Its insurance products and solutions are offered on a non-admitted (or excess and surplus (“E&S”)) and admitted basis, predominantly in the United States.
Everyone Loves a Discount
The word on the Street was that Skyward’s IPO was coming at “a decent discount to the group” of specialty insurance companies, the IPO professionals say.
Skyward’s competitors include Kinsale Capital Group (KNSL), which priced its IPO at $16.00 – the high end of its $14.00-to-$16.00 price range – on just 6.0 million shares – on July 27, 2016. Kinsale’s stock climbed over 12 percent on its first day of NASDAQ trading, closing at $18.35 on July 28, 2016. Fast forward to Jan. 13, 2023: Kinsale’s stock closed at $291.00 on Friday.
Based in Richmond, Virginia, Kinsale Capital Group is a property and casualty insurance provider that described its business in its prospectus in July 2016 as offering coverage in these specialty lines: construction, small business, general casualty, energy, excess casualty, professional liability, life sciences, product liability, allied health, healthcare, commercial property, environmental, management liability, inland marine and homeowners’ insurance.
Kinsale’s IPO after-market performance is eye-popping, to say the least.
As for Skyward’s IPO, even the deal’s skeptics had mostly nice things to say.
“It’s a vanilla deal,” one seasoned IPO trader says.
Skyward’s IPO was “the deal of the week.” It was one of three IPOs priced Thursday night and one of four deals priced this week. (For details on these deals, please keep reading.)
Bankers raised a total of $270.84 million this week from those four deals.
Wild Ride for Messi’s Brand MGO Global
Professional soccer star Lionel Messi’s licensed fashion apparel company, MGO Global (MGOL), priced its IPO at $5.00 on Thursday night (Jan. 12, 2023). The IPO – a tiny deal of just 1.5 million shares – raised $7.5 million.
Boustead Securities and Sutter Securities were the joint book-runners.
The stock’s first day of NASDAQ trading was almost as wild as a World Cup match.
MGO Global’s stock opened at $8.60 – up $3.60 or 72 percent from its $5.00 IPO price – at 10 a.m. EST in its NASDAQ debut today – Friday, Jan. 13, 2023. Trading in MGO Global’s stock was halted three times due to volatility this morning, with the most recent halt at 10:22 a.m. EST, according to Dow Jones Newswires. MGO Global’s stock was trading at $8.36 within a half-hour of its opening trade. The stock hit an intraday high above $16.00 about 11:14 a.m. EST.
After 1:30 p.m. EST today, MGO Global’s stock was trading at $5.12 – not far above its IPO price. Around 1:34 p.m. EST, MGO Global shares traded at $4.87, below their IPO price. The stock closed today at $4.65, down 35 cents or 7 percent below its $5.00 IPO price. Volume on MGO Global’s first day of trading as a NASDAQ company was 14.28 million shares.
MGO Global offers men’s casual clothes, accessories and home decor items, many featuring the soccer legend’s team colors – light blue, navy blue, red and white – and his jersey numbers “10” for Barcelona and Argentina and “30” for Paris Saint Germain. The clothing and other items are sold online via TheMessiStore.
With Messi mania running at full tilt following Argentina’s World Cup victory in Qatar, it’s not surprising that some Messi shirts were sold out on Friday in his brand’s online store.
Virginia “Ginny” Hilfiger, the younger sister of the iconic designer Tommy Hilfiger, is the design director and chief creative officer of MGO Global.
Israeli SPAC IPO Ranks as First of 2023
Israel Acquisitions Corp. (ISRLU) became the first SPAC IPO of 2023. The deal was priced on Thursday night (Jan. 12, 2023) in line with the terms in its prospectus: 12.5 million units at $10.00 each to raise $125.0 million. The SPAC IPO’s stock opened at $10.08 – up 8 cents or 0.8 percent – today (Friday, Jan. 13, 2023) – on the NASDAQ, according to the NASDAQ’s records. Israel Acquisitions Corp.’s stock closed at $10.13 – up 13 cents – or 1.3 percent – on Friday the 13th. Volume was 10.21 million shares.
BTIG was the sole book-runner. Exos Securities LLC and JonesTrading were the co-managers.
Israeli technology companies with enterprise values between $800 million and $1.5 billion are on Israel Acquisitions Corp.’s shopping list.
Lithium Miner Prices Public Offering – NASDAQ Uplisting
Atlas Lithium (ATLX) priced its public offering – in conjunction with its NASDAQ uplisting – on Monday night (Jan. 9, 2023). The Brazilian lithium mining company, which also has an office in Beverly Hills, raised $4.05 million with its public offering. The company sold 675,000 shares – up from 650,000 shares in the prospectus – in the public offering.
The Atlas Lithium public offering goes into the IPO yearbook as the first deal priced in 2023.
Atlas Lithium’s stock – priced well below range at $6.00 – jumped a little over 18 percent in its NASDAQ debut on Tuesday (Jan. 10, 2023).
On Friday (Jan. 13, 2023), Atlas Lithium’s stock closed at $7.54 – up $1.54 or 25.7 percent from its $6.00 public offering price.
MLK, Jr. Holiday on Monday
The third week of January starts with the federal holiday on Monday, Jan. 16, 2023, in observance of the birthday of the slain civil rights leader, Rev. Martin Luther King, Jr. The U.S. stock market will be closed that day.
Only two tiny IPOs are set for pricing so far during the holiday-shortened week.
Note: Never trade on proposed symbols. They have been known to change and you might buy something on the OTC Bulletin Board.
To see what time the NASDAQ IPOs are expected to trade, please log in to: NASDAQTrader.com then scroll down to IPO Message.
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