The IPO Buzz: TXO Energy Partners L.P. Climbs 10 Percent in NYSE Debut

Is this the year of the mid-point? TXO Energy Partners L.P. (TXO) gained 10 percent in its NYSE debut today (Friday, Jan. 27, 2023). TXO priced its IPO at the $20.00 mid-point of its $19.00-to-$21.00 range. TXO is the third IPO this year to price at the mid-point. The Fort Worth, Texas-based oil and gas partnership’s IPO of just 5.0 million common units raised $100 million. TXO is only the second IPO this year to raise $100 million or more. The TXO deal was priced on Thursday night (Jan. 26, 2023) in sync with the terms in its prospectus.

TXO (TXO) closed Friday’s session at $22.00 – the same print as its opening trade – up 10 percent from its $20.00 IPO price – on volume of 1.54 million shares on the New York Stock Exchange. During the day, TXO hit a session high of $22.99.

Raymond James, Stifel, Janney Montgomery Scott and Capital One Securities were the joint book-runners.

TXO plans to pay a cash distribution. That cash payout and its strong profits attracted plenty of interest from retail investors.

“It’s a retail yield play,” a seasoned IPO pro says. “And the energy sector is the right space.”

Allocations on TXO were said to be tight.

Bankers Price Four IPOs This Week

TXO Energy Partners’ successful IPO wrapped up the last full week of January. Bankers raised about $163.13 million by pricing four IPOs, including TXO.

Let’s take a look at the rest of the week’s deals, which included an Italian amateur soccer club’s tiny IPO, a clinical biotech’s nano-cap IPO and a Chinese EdTech company’s small-cap IPO.

Soccer IPO Slips

In contrast, the micro-cap IPO of Brera Holdings Plc (BREA) did not fare as well. Brera Holdings, the Irish parent of Brera FC, an amateur soccer club in Milan, Italy, priced its micro-cap IPO at $5.00 on Thursday night (Jan. 26) to raise $7.5 million. Brera’s stock opened flat at $5.00 and later fell as low as $3.70. At the close, Brera was at $4.82 on the NASDAQ. 

Reverse Securities was the sole book-runner for Brera’s IPO.

Tiny Biotech IPO Prices at Low End

Genelux Corp. (GNLX), a clinical biotech focused on ovarian cancer, priced its small-cap IPO on Wednesday night (Jan. 25, 2023) at $6.00 – the low end of its $6.00-to-$7.00 price range. The IPO – just 2.5 million shares – raised $15.0 million.

Genelux describes its lead drug candidate, Olvi-Vec, as a proprietary modified strain of DNA virus that kills cancer cells. Genelux is evaluating Olvi-Vec in patients with ovarian cancer in a Phase 3 clinical trial.

Shares of Genelux opened flat at $6.00 on Thursday (Jan. 26, 2023) in their NASDAQ trading debut. During the day, Genelux hit a session high of $7.94, touched a session low at $5.95, and rebounded to close at $6.15 – up 2.5 percent from its IPO price. First-day volume was about 1.55 million shares.

At Friday’s close, Genelux ended at $6.01 – up just 1 cent from its IPO price.

The Benchmark Company and Brookline Capital Markets were the joint book-runners for the Genelux IPO.

QuantaSing Group Swings 

China’s QuantaSing Group Limited (QSG) – the second company this year to price its IPO at the mid-point – opened with a nearly 10 percent gain in its NASDAQ debut on Wednesday (Jan. 25, 2023). The stock quickly changed course, though, closing at $12.52 – up just 2 cents from its IPO price.

QuantaSing leaped out of the gate. The stock shot up 9.6 percent to $13.70 – up $1.20 from its $12.50 IPO price – when the American Depositary Shares (ADS) started trading at 11:14 a.m. EST on Wednesday ( Jan. 25, 2023) on the NASDAQ. QuantaSing fell fairly quickly, though, trading at $12.70 at around 11:30 a.m. EST on Wednesday.

QuantaSing is the first U.S. IPO from a Chinese company this year. QuantaSing priced its U.S. IPO at $12.50 – the mid-point of its $11.50-to-$13.50 range – on 3.25 million ADS on Tuesday night (Jan. 24, 2023). The IPO raised $40.63 million. The pricing – in sync with the terms in the prospectus – was delayed from the previous week.

QuantaSing is known in China for its online financial literacy courses for adults. The company went public during the first week of the Chinese New Year. This is the Year of the Rabbit, a symbol of longevity, peace and prosperity in Chinese culture. 

Citigroup and CICC were the lead joint book-runners of QuantaSing’s IPO. US Tiger Securities, Inc., CLSA Limited, and Univest Securities LLC served as co-managers.The ADS were issued by QuantaSing’s Cayman Islands holding company and not by the underlying business, based in  Beijing. Each ADS represents three ordinary shares. 
Insider and anchor investors had indications of interest for up to $15.0 million – or about 37 percent – of the IPO, according to the prospectus.

After QuantaSing launched its IPO this month, the deal appeared to rekindle the relationships of Chinese companies with big U.S. investment banks. China’s Hesai Group (HSAI proposed) filed plans to go public in the U.S. during the week of Jan. 16, 2023. Goldman Sachs and Morgan Stanley are leading the joint book-runners’ team for Hesai Group’s IPO.

Stay tuned.