The IPO Buzz: Tech IPO Trade Winds

Seven biotech deals were on last week’s IPO calendar. Six made it out the door, and one was pushed back into this holiday- shortened week. Overall, the biotech IPOs were not wearing happy faces at week’s end.
By Friday’s close, Feb. 14, two of the six biotech IPOs were in the winner’s column, four were losers, and the average loss – yes, loss – for all six was 1.44 percent. That dismal performance came against the backdrop of a surging Nasdaq Composite Index. The Nasdaq closed on Friday the 14th at 4,244.03 – UP 2.86 percent for the week and at highs it hasn’t seen in 14 years. That came on April 7, 2000, when it closed at 4,446.45.
Now back to the IPO market and its trade winds.
The roadmap to the IPO market has always been its new-issues calendar. Its lifeblood flows from the U.S. Securities and Exchange Commission’s filing window. Question: With a surging Nasdaq Composite Index, can technology IPOs be far behind? You can be the judge.
Health, Wealth and the Cloud
Let’s revisit last week and look at the SEC filing window. Eleven companies filed plans to go public. Two were from the biotech sector and five were from the technology sector. Interestingly enough, one of the technology companies is tied to the healthcare sector. It is Castlight Health (CSLT – proposed) of San Francisco. Castlight Health is a cloud-based software provider that enables companies to control their rapidly escalating healthcare costs.
Energy from Oz
Turning to this week: The IPO calendar has a biotech carryover and a transplant from Australia. It is Sundance Energy Australia Limited (SNDE – proposed). Call it what you want. It is not really an IPO.
Broadway box office records show that lots of ladies loved Hugh Jackman in “The Boy from Oz” a few years back. This week, an ADS offering by an energy company from Oz is expected to dance on Wall Street’s stage.
Sundance Energy, incorporated in Australia, is an onshore oil and natural gas company engaged in the exploration, development and production of large, repeatable resource plays in North America. Sundance’s properties are located in premier U.S. oil and natural gas basins and its current operational activities are focused in the Eagle Ford, Mississippian/Woodford, Wattenberg Field, and Bakken in the Williston Basin. Formed in 2004, Sundance Energy has about 44 employees.
Underwriters plan to offer 7.75 million American Depositary Shares (ADS) at US$16.50 to US$18.50 each to raise US$135.6 million. Each ADS represents 20 ordinary shares. The deal is expected to be priced on Thursday evening to trade Friday morning on The NASDAQ Global Market. The joint-lead managers are: Wells Fargo Securities, Canaccord Genuity and UBS Investment Bank. The co-managers are: Scotiabank/Howard Weil and Simmons & Company International.
(Note: The deal is a follow-on offering, not an IPO. Consider the following: The ADSs represent ordinary shares and the underlying shares have been listed on the Australian Securities Exchange (ASE) since 2009. The stock trades under the symbol “SEA.” On Feb. 5, 2014, Sundance Energy closed on the ASE at A$1.00 per ordinary share, or the equivalent to US$17.78 per American Depositary Share based on an exchange rate of A$1.00 to US$0.8892.)
(Passing point of interest: An investor can buy stock in Sundance Energy in Australia ahead of the U.S. offering.)
Looking into next week, the calendar has one IPO. But more names could pop onto the IPO launching pad by the time that Monday, Feb. 24, rolls around.
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 opinions.