The three major U.S. stock market indexes closed at record highs on Friday and the IPO calendar joined the gold rush. That traffic opened the door to the future: Welcome back, Chinese and technology IPOs. Let’s take a look.
Last week’s calendar produced two Chinese IPOs that popped like New Year’s fireworks through Friday’s close – Qudian (QD), UP 37.5 percent from its IPO price, and RISE Education Cayman (REDU), UP 14.6 percent from its IPO price – plus a tech IPO that resembled a Roman candle – MongoDB (MDB), UP 27.8 percent from its IPO price. The aftermarket performances of these IPOs whetted the appetites of bankers and investors alike.
(For more information about these companies, please check the IPO profiles found on IPOScoop.com’s website.)
China in Play
So far in 2017, eight Chinese IPOs have been priced in the U.S. capital markets. At the close on Friday, Oct. 20, seven were winners – up sharply from their IPO prices.
What’s more: The average aftermarket gain for all eight Chinese IPOs priced in 2017 was 61.4 percent, as of Friday’s close.
So far in October, 10 IPOs have been priced – and three of those hail from the technology sector.(These volume figures exclude unit offerings.)
Worth noting: The technology IPOs of October have scored an average gain of 38.9 percent.
A Taste of Honey
Wall Street is all about making money. And a pot of honey with numbers like this attracts a lot of bees.
The U.S. Securities and Exchange Commission’s filing window confirms this. Check this out: Since the beginning of October, 18 companies have filed plans for IPOs. They are looking to raise about $2.85 billion. Note: Four filings were Chinese and three others were technology companies. And one technology IPO is on this week’s calendar.
An IPO Date for Eight
This week’s IPO calendar lists eight offerings, including two from special-purpose acquisition companies or SPACs. All told, this week’s eight IPOs expect to raise $2.55 billion.
The names on the calendar are: Ablynx NV (ABLX), BP Midstream Partners LP (BPMP – proposed), CM Seven Star Acquisition (CMSSU – proposed), ForeScout Technologies (FSCT – proposed), Haymaker Acquisition (HAYU – proposed), Merchants Bancorp (MBIN – proposed), National Vision Holdings (EYE – proposed) and Nexa Resources (NEXA – proposed).
Ablynx NV, based in Belgium, is a biopharmaceutical company developing therapeutic protein treatments for human diseases. The company focuses on therapeutic areas including inflammation, hematology, immuno-oncology, oncology and respiratory diseases. Its stock has been traded on the Euronext Brussels since November 2007.
BP Midstream Partners LP, based in Houston, operates pipelines and other midstream assets. The company owns crude oil, natural gas, refined products and diluent pipelines that serve as key infrastructure for BP Pipeline and other customers to transport onshore crude oil production to BP’s Whiting Refinery as well as offshore crude oil and natural gas production to key refining markets and trading and distribution hubs.
ForeScout Technologies, based in San Jose, California, is a provider of automated security control solutions. The company develops proprietary agentless technology that discovers and classifies IP-based devices in real time as they connect to the network and monitors their security posture.
Merchants Bancorp, based in Carmel, Indiana, operates multiple lines of business with a focus on FHA multi-family housing and healthcare facility financing and servicing, mortgage warehouse financing, retail and correspondent residential mortgage banking, agricultural lending and traditional community banking.
National Vision Holdings, based in Duluth, Georgia, is one of the largest optical retailers in the United States. As of July 1, 2017, the company operated 980 optical retail stores across five brands and 19 consumer websites.
Nexa Resources, with its main office in Sao Paulo, Brazil, is a large-scale, low-cost integrated zinc producer operating mines in Latin America. The company owns five long-life underground mines, three in the Central Andes of Peru and two in the state of Minas Gerais in Brazil. The company is organized under the laws of Luxembourg.
Spotting the SPACS
The special-purpose acquisition companies, also known as SPACs or “blank check” companies, on this week’s calendar are:
CM Seven Star Acquisition, based in Hong Kong, was formed for the purpose of entering into a merger, share exchange, asset acquisition, share purchase, recapitalization, reorganization or similar business combination with one or more businesses or entities, which we refer to as a “target business.” It does not have any specific business combination under consideration and has not, directly or indirectly, contacted any prospective target business or had any substantive discussions, formal or otherwise, with respect to such a transaction.
Haymaker Acquisition, based in New York City, intends to acquire and operate a business in the consumer and consumer-related products and services industries. The company believes its management team is well suited to identify opportunities that have the potential to generate attractive risk-adjusted returns for its stockholders.
For the week of Oct. 30, 2017, the IPO calendar lists three deals expecting to raise about $1.5 billion. However, when the SEC opens its filing window again on Monday morning, anything can happen.
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.