The IPO Buzz: Two Deals Wrap Up A Hot February

When the sun comes up on Wall Street on Monday morning, Feb. 24, the IPO Calendar will have already produced its first IPO of the week. It is a small-cap Chinese healthcare provider. Fast forward to this Friday’s close for the debut of the only other IPO of the week. Interestingly enough, that one is the talk of the town. It’s an American healthcare company, specifically a biotech developing gene therapy for rare diseases; more on this in a minute.

Monday morning trading

ZHONGCHAO (ZCMD) was scheduled to have been priced last week, and it was. On Friday night, Feb. 21, the Shanghai-based company announced via PRNewswire that it had priced 3 million ordinary shares at $4 each. That was down from its filing terms of 3.5 million shares at $4 to $4.50 each.

The Zhongchao IPO is expected to trade Monday morning, Feb 24, on the NASDAQ.

Zhongchao provides healthcare information, education and training services to healthcare professionals and the public in China. Formed in 2012, the company employs about 90 people. Zhongchao produced about $3.9 million in net income on $14.6 million of revenue for the 12 months ending June 30, 2019.

Thursday evening pricing for Friday morning trading

Passage Bio (PASG proposed), based in Philadelphia, is a genetic medicine company focused on developing transformative therapies for rare monogenic CNS disorders with limited or no approved treatment options. Formed in 2017, the company employs about 20 people. Passage Bio has entered into a strategic research collaboration with the University of Pennsylvania’s Gene Therapy Program.

The word from Wall Street is the IPO is oversubscribed and in demand.

The company plans to price 7.4 million shares at $16 to $18 each on Thursday evening for trading Friday morning on the NASDAQ.

A Honey of A February

This pretty well wraps up February, but it has been a good month for IPOs, as of the close on Friday, Feb. 21st. It may be better than most people think.

On Feb. 21, 2020, IPOScoop.com’s “2020 IPO Scorecard” showed a total of 10 IPOs were priced during February and the last one started trading on Feb. 13. Since then, four of February’s eight “blank check” companies were priced. In a nutshell, two weeks of “blank check” deals (all unit offerings) make for a boring time in the Land of IPOs. But what some might be missing is that it has been a Land of Honey for the 2020 IPO Scorecard, as of the close on Friday,Feb. 21, 2020. (The IPO Scorecard excludes unit offerings.) Let’s take a look:

  • 10 IPOs Priced
  • 8 IPOs up
  • 2 IPOs down
  • 41.99 percent was the average gain for all 10 IPOs.
  • 4.65 percent was the gain for the NASDAQ Composite.

The NASDAQ closed at 9,576.59 on Feb. 21, 2020, up from 9,150.94 on Jan. 31, 2020.

February’s winner was:

Schrodinger (SDGR) priced 11.9 million shares at $17 on Feb. 5, 2020. The stock closed on Friday, Feb. 21, at $50, up 194.12 percent from its IPO price.

February’s loser was:

Muscle Maker (GRIL) priced 1.54 million shares at $5 on Feb. 12. The stock closed on Feb. 21 at $3.70, down 26 percent from its IPO price.

(For more information, please check the company profiles on IPOScoop.com’s website.)

Peeking at March

This brings us to the week of March 2nd and the IPO Calendar is blank so far. But that could change quickly when the U.S. Securities and Exchange Commission’s filing window opens again for business on Monday, Feb. 24.

Stay tuned.

Disclosure: Neither the author nor anyone else on the IPOScoop.com staff has a position in any stocks mentioned, nor do we trade or invest in IPOs. The author and IPOScoop.com staff do not issue advice, recommendations or opinion.