The IPO Buzz: Tech IPOs Rule July – And 2016

As July rolls into its final week, a couple of things are starting to surface in the equity capital markets. One is the return of IPOs. The other is that technology is leading the way.

Last week’s calendar produced four IPOs and this week has another four. At a rate of four per week, the annual traffic – based on 52 weeks – is 208 IPOs. This pace works out to a monthly average of 17.3 initial public offerings. That volume is sharply higher than the traffic in the first six months of 2016, when 34 IPOs were priced. The first-half figure works out to a monthly average of 5.7 IPOs.

This data is based on the U.S. Securities and Exchange Commission filings. Please note: It excludes bank conversions, “best effort” offerings, closed-end funds, companies trading on the OTC markets moving up to the NASDAQ, unit offerings and foreign-traded securities making their debuts in the U.S. capital markets. The latter are public offerings. Investors can buy the underlying shares on foreign exchanges before their U.S. pricing dates.

Digging deeper, there’s more good news in the numbers.

Best of the Week

Last week’s top IPO performer was a technology company.

IMPINJ (PI), a manufacturer of radio-frequency identification devices (RFID) and software, priced its IPO at $14 on Wednesday, July 20. It opened at $18 on Thursday, July 21, and closed the week on Friday, July 22, 2016, at $19.56, UP 39.7 percent from its IPO price.

But that’s not all.

Best of the Year

Technology tops 2016’s IPO aftermarket performance. As of Friday’s close on July 22, the year’s two best performers were:

No. 1: Twilio (TWLO)

On June 22, Twilio priced its IPO at $15. It closed Friday, July 22, at $40.81, UP 172.1 percent from its IPO price.

No. 2: Acacia Communications (ACIA).

On May 12, Acacia priced its IPO at $23. It closed Friday, July 22, at $59.16, UP 157.2 percent from its IPO price.

And there’s more.

Biggest IPO of 2016

A technology offering was the year’s biggest IPO.

LINE Corporation (LN) priced its IPO of 35 million American Depositary Shares (ADS) at US$32.84 each on July 13 to raise US$1.15 billion. The ADSs closed Friday, July 22, at US$38.58, UP 17.5 percent from its IPO price.

Hold on. We’re not done here.

Dancing with Big Data

There is a technology IPO on this week’s calendar – and guess what? The IPO handicappers consider it “the pick of the week.”

Talend SA (TLND – proposed), based in France, provides a software platform, known as Talend Data Fabric, that integrates data and applications in real time across big data and cloud environments. The company has a broad customer base that includes Allianz, Citi, General Electric, Lenovo and Siemens. Its customers represent a range of industries, including financial services, technology, telecommunications, healthcare, manufacturing and retail. Talend has developed an ecosystem of over 120 partners, including Cloudera, Hortonworks, MapR, and Amazon Web Services, as well as many leading systems integrators such as Accenture and Capgemini. According to its prospectus, Talend’s principal shareholders include an entity controlled by Silver Lake Partners, the private equity firm known for its investments in technology.

Bankers plan to price 5.25 million American Depositary Shares (ADS) at $15 to $17 each on Thursday evening, July 28, to trade Friday morning, July 29.

Bones, Biopharma and Insurance

Rounding out the rest of this week’s calendar are Bioventus (BIOV – proposed), Kadmon Holdings (KDMN – proposed) and Kinsale Capital Group (KNSL – proposed).

Bioventus, based in Durham, North Carolina, is a medical technology company that focuses on the development and commercialization of orthobiologic products to treat patients suffering from a range of musculoskeletal conditions. Its products include the Exogen ultrasound system to stimulate healing of bone fractures; HA (hyaluronic acid)injections to relieve pain and improve mobility of patients with osteoarthritis in a knee or a hip, and bone graft substitutes, according to its prospectus.

Bankers plan to price 8.8 million shares at $16 to $18 each on Thursday evening, July 28, to trade Friday morning, July 29.

Kadmon Holdings, based in New York City, is a fully integrated biopharmaceutical company engaged in the development of small molecules and biologics to address disease areas of significant unmet medical need. The company is developing product candidates to treat autoimmune diseases such as psoriasis as well as treatments for fibrotic diseases, cancer and genetic diseases.

Bankers plan to price 5.6 million shares at $16 to $20 each on Tuesday evening, July 26, to trade Wednesday morning, July 27.

Kinsale Capital Group, based in Richmond, Virginia, is a property and casualty insurance provider offering coverage to 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.

Bankers plan to price 6 million shares at $14 to $16 each on Wednesday evening, July 27, to trade Thursday morning, July 28.

Looking into the week of Aug. 1, the calendar was clean and green at press time. But anything could happen on Monday morning, which could set the stage for the following week.

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.