The IPO Buzz: The IPO Gold Rush

The IPO gold rush is in full swing with 14 deals on tap this week. Chindata, Mission Produce and PulmonX are attracting attention among the 10 traditional IPOs set for pricing this week. This lineup of 14 deals includes a NASDAQ uplift and a SPAC as well as the direct listings of Asana and Palantir Technologies.

Bankers expect to raise about $2.1 billion from 12 deals, including the uplift and the SPAC. (The direct listings are excluded.)

At this point, only hermits without WiFi would be unaware that 2020 is the busiest year for IPOs since 2014.

Low U.S. interest rates, a strong U.S. stock market and the desire by some on Wall Street to get deals done before the U.S. presidential election are driving the huge volume of IPOs.

Eleven traditional IPOs were priced last week. Two were moonshots, jumping 100 percent from their IPO prices on their first day of trading: PMV Pharmaceuticals (PMVP) closed at $37.51 on Friday in its NASDAQ debut, up 108.4 percent from its $18 IPO price, and Laird Superfood (LSF) hit an intraday high at $44 on Wednesday  in its NYSE – American debut, doubling its $22 IPO price. Bankers raised $2.4 billion last week from these 11 initial public offerings. (This deal count excludes eight SPACs that were priced last week. A SPAC is a special-purpose acquisition company, also known as a blank-check company.)

The scene at the U.S. Securities and Exchange Commission’s filing window was hectic. A total of 26 companies filed to go public last week. Eight new filings – or nearly a third of last week’s batch– were traditional IPOs, while the rest were SPACs.

This Week’s IPOs

Let’s take a look at the 13 of the 14 deals on this week’s IPO Calendar, organized by pricing and trading dates. (The NASDAQ uplift offering by Orphazyme A/S (ORPH proposed) was priced Monday night.)

IPOs – Tuesday night pricing for Wednesday trading:

Four deals – three traditional IPOs and one SPAC – are scheduled for pricing Tuesday night to start trading Wednesday.

Chindata Group Holdings Limited (CD proposed) is a big business data center operator focused on China, India and Malaysia. The company is based in Beijing. Bain Capital Entities will control Chindata after the IPO.

Chindata said 81.6 percent of its revenue comes from ByteDance, the Chinese owner of the short video-sharing app TikTok, according to the prospectus.

A U.S. federal judge on Sunday temporarily blocked a Trump administration order banning Apple and Alphabet’s Google from offering TikTok for download in the U.S., Reuters reported. The Trump order was expected to take effect Sunday at 11:59 p.m.

This is an IPO of 40 million ADS at $11.50 to $13.50 each to trade on the NASDAQ.

Lixiang Education Holding Co., Ltd. (LXEH proposed) offers private primary and middle-school education services in China.

This is an IPO of 3.3 million ADS at $9 to $11 each to trade on the NASDAQ.

Recharge Acquisition Corp. (RCHGU proposed), based in Sarasota, Florida, is a newly organized blank check company or SPAC whose CEO is Tony Kenney, the former president of Speedway, the chain of convenience and fuel stores owned by Marathon Petroleum Corp.

This is an IPO of 20 million units at $10 each to trade on the NASDAQ.

Yalla Group Limited (YALA proposed) is the voice-centric mobile social network and entertainment app for the Middle East North Africa (MENA) region. Yalla makes most of its money from users’ purchases of virtual gifts and service upgrades. The company is based in Dubai. About 12.5 million users visited the Yalla platform on average each month during the second quarter of 2020, according to the prospectus.

This is an IPO of 18.6 million ADS at $7 to $9 each to trade on the NYSE.

Direct Listings – Tuesday night pricing for Wednesday trading:

Two direct listings – Asana and Palantir Technologies – are set for pricing Tuesday night. Their shares of Class A common stock are expected to start trading Wednesday on the New York Stock Exchange. Direct listings are done only on the NYSE.

Unlike an IPO, a direct listing does not involve the issuance of new shares of common stock. In a direct listing, no underwriters are involved. Instead of underwriters, the company usually hires one or more investment banks to serve as financial advisors.

In a direct listing, the company’s registered shareholders sell shares of Class A common stock. The stock’s opening trading price on the NYSE will be determined by buy and sell orders collected by the NYSE from broker-dealers. Based on those orders, the designated NYSE market maker will determine an opening price for the Class A common stock in consultation with the company’s financial advisors.

Asana (ASAN proposed) is a direct listing in which Asana’s registered shareholders are selling 30.03 million shares of Class A common stock.

Based in San Francisco, Asana sells workplace collaboration and productivity software to 82,000 paying customers. These customers represent two-thirds of the Fortune 500 companies, the prospectus says. Asana was co-founded in 2008 by Dustin Moskovitz, who was a co-founder of Facebook. Moskovitz is Asana’s CEO, president and board chairman.

Asana is not profitable, according to the prospectus.

Palantir Technologies (PLTR proposed) provides data-analysis software to U.S. government agencies, including the CIA and ICE, as well as to big businesses. Palantir recently moved its headquarters to Denver from Palo Alto, California.

Billionaire investor Peter Thiel, a co-founder of PayPal, joined with a group of investors to found Palantir in 2003. Palantir has never been profitable, according to the prospectus.

Palantir’s registered shareholders are offering 257.1 million shares in the direct listing. The Wall Street Journal reported that Palantir’s bankers have told investors the shares could start trading on the NYSE at around $10 each, according to people familiar with the matter.

Wednesday night pricing for Thursday trading:

Mission Produce (AVO proposed) is one of the world’s leading producers, importers and distributors of avocados, known as “green gold” in Mexico. The company, based in Oxnard, California, serves wholesale and retail customers in 25 countries. Founded in 1983, Mission Produce is profitable with a market cap of about $1.1 billion.

Mission Produce says it believes that it was the first U.S. company to import avocados from Mexico, Peru and Chile, adding that it was “the first to incorporate ripening centers in the distribution process.”

This is an IPO of 9.4 million shares at $15 to $17 each to trade on the NASDAQ.

PulmonX (LUNG proposed) is a medical device company whose product, the Zephyr Valve, can be implanted in the lungs of people suffering from severe emphysema, a form of COPD, to help them breathe more easily. The company is based in Redwood City, California. Boston Scientific Corp. is a major shareholder.

This is an IPO of 6.7 million shares at $14 to $16 each to trade on the NASDAQ.

Thursday night pricing for Friday trading:

Four deals are set for pricing Thursday night, to start trading Friday morning.

Academy Sports + Outdoors (ASO proposed) has grown from a family business founded in 1938 in Katy, Texas, to a chain of 259 stores in 16 states, primarily in the South. The company competes with Dick’s Sporting Goods.

Academy Sports + Outdoors earned $120 million in net income on $4.8 billion in revenue in the last 12 months; it also reported about $1.4 billion in debt as of Aug. 1, 2020, the prospectus says.

After the IPO, investment entities owned by investment funds and other entities affiliated with Kohlberg Kravis Roberts & Co. L.P., the private equity firm, will own about 70 percent of the voting power of the company’s common stock, the prospectus says.

This is an IPO of 15.6 million shares at $15 to $17 each to trade on the NASDAQ.

C4 Therapeutics (CCCC proposed) is a biopharmaceutical company using its protein degrader platform called TORPEDO to develop a pipeline of oral drug candidates to treat multiple myeloma, peripheral T-cell lymphoma and mantle cell lymphoma. The company is based in Watertown, Massachusetts.

This is an IPO of 8.8 million shares at $16 to $18 each to trade on the NASDAQ.

Immunome (IMNM proposed) is a biopharmaceutical company using its “proprietary human memory B cell platform to discover and develop first-in-class antibody therapeutics designed to change the way diseases are currently being treated,” the prospectus says. The company is based in Exton, Pennsylvania.

This is an IPO of 2.5 million shares at $11 to $13 each to trade on the NASDAQ.

Oncorus (ONCR proposed) is a clinical-stage biopharmaceutical company focused on developing next-generation viral immunotherapies to transform treatment results for cancer patients. The company is based in Cambridge, Massachusetts.

This is an IPO of 5.8 million shares at $14 to $16 each to trade on the NASDAQ.

Pricing Week of Sept. 28

Boqii Holding (BQ proposed) runs China’s largest online pet-supply store. It also operates the country’s largest platform for pet owners to connect and socialize. Boqii’s principal shareholders include an investment company owned by Goldman Sachs, the prospectus says.

This is an IPO of 7 million ADS at $10 to $12 each to trade on the NYSE.

(For more information on these companies, please see the IPO profiles on the website.)

Looking at October

Only one deal – a SPAC – is on the schedule for the week of Oct. 5, the first full week of the month. But that could change in the blink of an eye as more companies flock to the SEC’s filing window.

Stay tuned.

Disclaimer: A SCOOP Rating (Wall Street Consensus of Opening-day Premiums), is a general consensus taken, at press time, from Wall Street and investment professionals concerning how well an IPO might perform when it starts trading. The SCOOP Rating does not reflect the opinions of anyone associated with The SCOOP ratings should not be taken as investment advice. The rating merely reflects the opinion of the professionals at the time of publication and is subject to last-minute changes due to market conditions, changes in a specific offering and other factors, such as changes in the proposed offering terms and the shifting of investor interest in the IPO. The information offered is taken from sources we believe to be reliable, but we cannot guarantee the accuracy.

Disclosure: Nobody on the staff has a position in any stocks mentioned above, nor do they trade or invest in IPOs. The staff does not issue advice, recommendations or opinions.