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.

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Commercial flooring roll-up F5 Finished (FLRZ) filed to raise $49 million and Chinese chemical producer Qilian International Holding (QLI) filed to raise $24 million. PropTech Acquisition (PTACU), a blank check company targeting the real estate tech industry, filed to raise $150 million.

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In other news, immuno-oncology biotech NextCure (NXTC), which went public in May, is now the best performing IPO of 2019, with a 453% total return. NextCure’s stock jumped nearly 250% on Tuesday after the company disclosed positive trial results, including one patient achieving complete remission.

IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. As of 11/7/19, the Renaissance IPO Index was up 25.5% year-to-date, while the S&P 500 had a gain of 23.1%. Renaissance Capital's IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include Spotify (SPOT) and VICI Properties (VICI). The Renaissance International IPO Index was up 19.2% year-to-date, while the ACWX was up 17.6%. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include Meituan-Dianping and SoftBank.
The article US IPO Weekly Recap: Small Chinese and healthcare deals price down in an 8-IPO week originally appeared on IPO investment manager Renaissance Capital's web site renaissancecapital.com.

Investment Disclosure: The information and opinions expressed herein were prepared by Renaissance Capital's research analysts and do not constitute an offer to buy or sell any security. Renaissance Capital's Renaissance IPO ETF (symbol: IPO), Renaissance International ETF (symbol: IPOS), or separately managed institutional accounts may have investments in securities of companies mentioned.

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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