Today saw the 100th IPO of 2014, bringing the total up to 102.
of these are now trading below their IPO price. Today's IPOs
continued a pattern of poor trading that has plagued the IPO
market since mid-March. The four fell 0.2% on average with a 9%
discount below the midpoint. The Chinese security app
developer Cheetah Mobile (
) was the day's best performer, pricing above the midpoint and
trading up nearly 1%. GasLog Partners (
), which began trading on Wednesday, fared better with a 24% pop.
However, not every company offers a 7%+ yield.
11 IPOs priced in the last three weeks and have come to market
with average discount of 20% below the midpoint and an average
first day pop of -3%. Six traded down on the day of their IPO. Up
until 3 weeks ago, the average first day return had been 17%
year-to-date. Aftermarket returns have also suffered. At
quarter-end, the year's average IPO traded up about 7% after its
first day. That number is now -8% YTD, meaning IPO investors are
not making money on the day of the offering, nor in the
The broader market's impressive rally during 2013 likely
contributed to this year's record
number of IPOs
unseen since 2000. However, IPO returns must swing positive or
investors will be hard to find.
IPOs on 5/8/14
Deal Size ($mm)
Offer Price vs Midpoint
First Day Return
|Cheetah Mobile (
||Chinese mobile security apps
|Alder Biopharmaceuticals (
|K2M Group Holdings (
||Spinal surgery devices
|Dorian LPG (
||Liquefied petroleum gas carriers
For a look at post-IPO performance, the Renaissance IPO ETF
) serves as a cap-weighted basket of newly public companies. In
the past 30 days, it has traded down 3.7%, compared with -4.1%
for the Russell 2000.