IPOs

US tech looks to test a challenging IPO market

US tech IPOs virtually disappeared in the 4Q19 following disappointments from multiple fast-growing, unprofitable unicorns. Healthcare (55% of 4Q IPOs) and Chinese issuers (24%) have monopolized IPO deal flow since October, but tech is returning to market alongside a comeback in the IPO Index. Back-office automation unicorn Bill.com (BILL) and social media management software Sprout Social (SPT) are expected to IPO next week, joined by Chinese software platform OneConnect Financial Technology (OCFT).

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US Tech Issuers with $1B+ Valuations at IPO
1Q19 1
2Q19 8
3Q19 6
4Q19 0



US Tech Issuers with $1B+ Valuations at IPO More Pricing Pressure in the 4Q19 IPO Market
1Q19 1 In the 9mo19 In the 4Q19
2Q19 8 # of IPOs 119 33
3Q19 6 Avg Offer Price vs. Midpoint 2% -10%
4Q19 0 % of Pricings Below Midpoint 30% 76%
Avg First Day Return 21% 4%
Avg Aftermarket Return -4% 8%
Avg Return from IPO 16% 14%
% Trading Above Issue 54% 64%
US tech looks to test a challenging IPO market

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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