The IPO Buzz: Tearing Up the Script

All you need to know about the IPO market can be found in two places. The first is the calendar. It tells you when IPOs are to be priced. The other place is the U.S. Securities and Exchange Commission (SEC) filing window. It tells you what is going into the IPO pipeline for future pricings.

August 2018 was unusual. It tore up the script.

The August 2018 calendar produced six IPOs plus an additional eight unit offerings, according to SEC filings. What was unusual about the calendar was that it kept turning out IPOs after mid-August, which traditionally is the start of the pre-Labor Day holiday break. The last IPO began trading on the final day of August. That usually does not happen.

Another unusual thing about August was the traffic: A total of 33 companies filed plans for IPOs with the SEC. That was the largest monthly volume since June 2015, when 41 companies filed to go public.

China Wave

Even more interesting: China accounted for a big batch of the August filings. Ten of the 33 new IPO filings were by Chinese companies. And that traffic has already bitten into the U.S. IPO calendar.

As of Sept. 3, the IPO Calendar lists two Chinese names. Each is scheduled to be priced Tuesday evening, Sept. 11, to trade on Wednesday morning, Sept. 12th. These two companies are looking to raise almost $1.3 billion:

111 (YI proposed), based in Shanghai, says it provides hundreds of millions of consumers with access to pharmaceutical products and medical services directly through its online retail pharmacy, indirectly through its offline pharmacy network and through its Internet clinic.

NIO (NIO proposed), based in Shanghai, designs, manufactures and sells electric vehicles.

(For more information about these companies and others on the IPO calendar, please check the profiles found on the website.)

There’s another significant fact to take into account when considering this influx of Chinese IPOs: The Shanghai Composite Index closed on Monday, Sept. 3, 2018, at 2,720.73 – down 23.6 percent from 3,559.47, its previous closing high on Jan. 24, 2018. That’s bear market territory.

No IPOs This Week

This brings us to the present, the week of Sept. 3. There is nothing scheduled this week.

The two IPOs mentioned above are on for the week of Sept. 10. But anything can happen when the U.S. Securities and Exchange Commission’s filing window opens for business again on Tuesday morning, Sept. 4.

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.