IPOs

US IPO Weekly Recap: Small Chinese and healthcare deals price down in an 8-IPO week

Eight small companies and four SPACs entered the public market this past week. Continuing a 4Q trend, all eight deals priced below the midpoint; the average IPO priced 11% below the midpoint, traded up 1% on its first day, and finished the week up 3%. Four of the eight had significant insider buying. Two companies postponed their US listings, including GFL’s $1.9 billion attempt at the largest Canadian IPO ever. Two companies and one SPAC submitted initial filings.

Three Chinese issuers completed IPOs this past week, led by real estate company Q&K International (QK). After cutting its share offering nearly in half, Q&K raised $46 million at an $826 million market cap. The company is highly unprofitable and its growth has slowed in 2019, but its established portfolio makes it the #1 player in Shanghai; Q&K finished up 12%. Online media publisher 36KR Holdings (KRKR) slashed its deal size by 62% before pricing to raise a fully covered $20 million at a $581 million market cap before finishing down 10% as the week’s worst performer. Health and wellness retailer ECMOHO (MOHO) raised $44 million at a $342 million market cap and finished up 1%.

California bank Silvergate Capital (SI) raised $40 million in its downsized offering to command a $229 million market cap. The company has first-mover advantage targeting customers in the digital currency space, which should continue to support its solid growth. Silvergate Capital finished the week up 9%.

Phase 3 oral mucositis biotech Galera Therapeutics (GRTX) raised $60 million in the week’s largest deal to command a $317 million market cap; it finished the week flat. Micro-cap brain cancer biotech CNS Pharmaceuticals (CNSP) raised $9 million and finished up 14%.

German diagnostics provider Centogene (CNTG) raised $56 million, more than half of which was covered by insiders, to command a $289 million market cap. Unprofitable with concentrated revenue from its top customer, Centogene quickly broke issue and finished the week down 7%. Micro-cap medical device company TELA Bio (TELA) raised $52 million and finished up 3%.

GFL Environmental (GFL), North America’s fourth-largest diversified waste management firm, postponed its $1.9 billion IPO as investors balked at its proposed valuation and high debt level. Micro-cap mucositis biotech Monopar Therapeutics (MNPR) postponed its IPO for the second time.

12 IPOs During the Week of November 4th, 2019
IssuerBusiness Deal Size Market Cap at IPO Price vs. Midpoint First Day Return Return at 11/08
CNS Pharmaceuticals (CNSP) $9M $67M -11% +14% +14%
Early stage biotech developing therapies for brain cancer and other CNS tumors.
Q&K International (QK) $46M $826M -6% +4% +12%
Renovates and sub-leases apartments in Chinese cities.
Silvergate Capital (SI) $40M $229M -14% +4% +9%
California commercial bank with a focus on digital currency businesses.
TELA Bio (TELA) $52M $142M -13% +3% +3%
Sells soft tissue implants used in hernia repair and reconstructive surgery.
ECMOHO (MOHO) $44M $342M -9% +1% +1%
Operates online stores for health and wellness brands in China.
Stable Road Acquisition (SRACU) $150M $193M 0% +1% +1%
Blank check company focused on companies within the cannabis industry.
LGL Systems Acquisition (DFNSU) $150M $181M 0% +0% +0%
Blank check company led by Marc Gabelli and the co-founder of L3 Technologies targeting the defense industry.
Juniper Industrial (JIH.U) $300M $375M 0% +0% +0%
Blank check company led by past and present Honeywell executives targeting a North American industrial business.
Galera Therapeutics (GRTX) $60M $317M -20% +0% +0%
Phase 3 biotech developing treatments for radiotherapy-induced oral mucositis.
Merida Merger I (MCMJU) $120M $146M 0% +0% +0%
Blank check company formed by Merida Capital Partners targeting the cannabis industry.
Centogene (CNTG) $56M $289M -7% -11% -7%
Provides genetic tests for rare disease diagnostics and drug development.
36KR Holdings (KRKR) $20M $581M -9% -10% -10%
Online media publisher focused on New Economy companies in China.

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F5 Finished Qilian International Holding PropTech Acquisition

12 IPOs During the Week of November 4th, 2019 3 Filings During the Week of November 4th, 2019
IssuerBusiness Deal Size Market Cap at IPO Price vs. Midpoint First Day Return Return at 11/08 IssuerBusiness Deal Size Sector Lead Underwriter
CNS Pharmaceuticals (CNSP) $9M $67M -11% +14% +14% F5 Finishes (FLRZ) $49M Consumer Discretionary Maxim
Early stage biotech developing therapies for brain cancer and other CNS tumors. A roll-up of commercial flooring providers.
Q&K International (QK) $46M $826M -6% +4% +12% PropTech Acquisition (PTACU) $150M SPAC Cantor Fitz.
Renovates and sub-leases apartments in Chinese cities. Blank check company targeting the real estate tech industry.
Silvergate Capital (SI) $40M $229M -14% +4% +9% Qilian International (QLI) $24M Materials Univest Securities
California commercial bank with a focus on digital currency businesses. Chinese producer of traditional medicines, chemicals, and fertilizers.
TELA Bio (TELA) $52M $142M -13% +3% +3%
Sells soft tissue implants used in hernia repair and reconstructive surgery.
ECMOHO (MOHO) $44M $342M -9% +1% +1%
Operates online stores for health and wellness brands in China.
Stable Road Acquisition (SRACU) $150M $193M 0% +1% +1%
Blank check company focused on companies within the cannabis industry.
LGL Systems Acquisition (DFNSU) $150M $181M 0% +0% +0%
Blank check company led by Marc Gabelli and the co-founder of L3 Technologies targeting the defense industry.
Juniper Industrial (JIH.U) $300M $375M 0% +0% +0%
Blank check company led by past and present Honeywell executives targeting a North American industrial business.
Galera Therapeutics (GRTX) $60M $317M -20% +0% +0%
Phase 3 biotech developing treatments for radiotherapy-induced oral mucositis.
Merida Merger I (MCMJU) $120M $146M 0% +0% +0%
Blank check company formed by Merida Capital Partners targeting the cannabis industry.
Centogene (CNTG) $56M $289M -7% -11% -7%
Provides genetic tests for rare disease diagnostics and drug development.
36KR Holdings (KRKR) $20M $581M -9% -10% -10%
Online media publisher focused on New Economy companies in China.

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IPO Market Snapshot

US IPO Weekly Recap: Small Chinese and healthcare deals price down in an 8-IPO week

Investment Disclosure: Renaissance IPO ETF (symbol: IPO) Renaissance International ETF (symbol: IPOS)

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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