The IPO Buzz: Waiting for the Election

On Wall Street, the waiting game will be in vogue until after the 2016 U.S. presidential election on Tuesday. Only one IPO is on the calendar this week. That’s in keeping with the traditional pause or slowdown in IPO pricings around Election Day.

IPOScoop’s records show that in every election year from 2000 onward, the pace of IPOs either dropped to zero or just a handful of deals in the week when Americans went to the polls to cast their votes for president and members of Congress.

Some Positive Numbers

The prerequisite for a healthy IPO market is a strong U.S. stock market. The NASDAQ Composite Index, the barometer of the IPO market, is up 0.78 percent for the year. The Dow Jones Industrial Average is up 2.66 percent for the year, while the Standard & Poor’s 500 Index is up 2.02 percent for 2016 so far.

IPOs, in turn, continue to outperform the broad U.S. stock market. This year, 83 initial public offerings have been priced, excluding 12 unit offerings. The average gain is 21.58 percent from issue price, according to the 2016 IPO Scorecard.

Birth Control for Rats

The solo act on this week’s IPO Calendar is SenesTech (SNES -proposed). The company’s first product candidate is designed to control rat populations by making it impossible for rodents to reproduce. Let’s take a look.

SenesTech, based in Flagstaff, Arizona, has developed and is seeking to commercialize globally “a proprietary technology for managing animal pest populations through fertility control.” The company says it believes that “our innovative non-lethal approach, targeting reproduction, is more humane, less harmful to the environment, and more effective in providing a sustainable solution to pest infestations than traditional lethal pest management methods.”

ContraPest, its first product candidate, “targets the reproductive capabilities of rodents by inducing the gradual loss of eggs in female rodents and disruption of sperm in male rodents, resulting in contraception that can progress to sterility in both females and males,” SenesTech says in its prospectus. The product is “environmentally friendly” and “does not contain poisons,” according to the prospectus.

Bankers expect to price 2 million shares at $12 to $14 each to raise $26 million sometime during the week of Nov. 7, with the stock listed to trade on the NASDAQ.   

Looking ahead to the week of Nov. 14, the IPO Calendar is clean and green. But anything could happen to change that scenario when the U.S. Securities and Exchange Commission’s filing window opens for business on Monday morning.

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.