The IPO Market’s Winners and Losers Last Week – February 19, 2023
Renaissance Capital LLC
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Year-to-date, 16 companies have priced US IPOs, right in line with this point in 2022. However,?momentum?is a mirror image of last year.
The Renaissance IPO Index added another +5.3% return this week compared to a -0.3% decline for the S&P 500. Our largest IPO constituent,?Airbnb, returned an impressive +20.9%, joined by tech platforms?DigitalOcean?(+27.9%) and?Palantir?(+22.5%).
So far the IPO Index is up +19.2% this year, 3x the S&P 500.
Some caveats. We’re still seeing volatility: IPO performance soared in the first half of the week, then pulled back on Thursday and Friday. And we know that once-in-a-decade bear markets have “false bottoms.”
But regardless of whether this is a short-lived rally or the start of a long bull market, more companies will use this opportunity come to market.
Reddit?dominated IPO headlines this week, with news that it plans to go public in the second half. We also see pipeline activity from energy and restaurants, along with lesser-known unicorns.
No major pricings this past week, with a couple of micro-caps and SPACs. A whopping eight companies submitted initial filings, all small. The largest, US oil & gas play?Alpha Energy (APHE)?filed to raise $29 million. And frac sand company?Atlas Energy Solutions (AESI)?became the first large IPO to update its filing with 2022 numbers.
US markets are closed Monday for Presidents’ Day, but activity typically picks up after that.
Take care,