Weekly Recap: US IPOs end November slide

Both IPOs performed well last week in a much needed reversal for the US IPO market . Although Alon USA Partners ( ALDW ) and YY Inc. ( YY ) both priced below their midpoints, each made gains in its first day of trading. This followed two weeks in which five IPOs postponed and the only company to complete its IPO, Ruckus Wireless ( RKUS ), had an 18% first-day drop. The turnaround opens the possibility of an active December, with three companies already signaling intentions of completing IPOs before the end of the year.

Very high yield drives interest in Alon

A low interest rate environment has raised demand for high-yield LPs recently, but none has offered a higher yield than Alon USA Partners. The Texas-based oil refiner projected a next-twelve months yield of 32.5% at its IPO price, more than twice the yield offered by close peer Northern Tier ( NTI ). By pricing below the range of $19 to $21, the company raised $160 million, and the stock jumped 15% on the first day of trading. Goldman Sachs, Credit Suisse and Citi acted as joint bookrunners on the deal.

First US IPO from China since March gains 7%

YY, a Chinese social platform that enables group communication via voice, text and video, raised $82 million by pricing at $10.50, the low end of the $10.50 to $12.50 range. It was the first US IPO from a Chinese company since Vipshop ( VIPS ) went public in March. The high-growth company (revenue is up 168% YTD to $88 million) gained 8% on its first day. Venture backers include Morningside, Steamboat Ventures, Granite Global and Tiger Global. Morgan Stanley, Deutsche Bank and Citi acted as joint bookrunners.

Three deals tentatively scheduled for December

Although no new companies filed or launched last week, Reuters reported that solar panel installer SolarCity (SCTY) would attempt to go public in December. It is now the third company slated for December, after Gladstone Land Corporation (LAND), a small agricultural REIT, and Audeo Oncology (AURX), a biotech, set terms earlier this month for $50 million and $49 million IPOs respectively.

Large volume of pipeline updates

Seven more companies released updates to their filings last week, and, in the past 90 days, 48 companies have updated their filings, creating a large pool of candidates for IPOs next month. Some prominent names include apartment REIT Archstone (ASN), child care provider Bright Horizons (BFAM), petroleum refiner PBF Energy (PBF) and cokemaking LP SunCoke Energy Partners (SXCP).

Altogether, the US IPO pipeline holds 123 companies looking to raise $39.6 billion.

US IPO performance rebounds

Bouncing back from the lows of last week, recent US IPOs enjoyed a strong week. The 33 IPOs from the past 90 days have produced an average aftermarket return (excluding first-day returns) of 2% and an average total return of 15% (vs. 0% and 12% respectively last week). In 2012, there have been 124 IPOs, just one shy of last year's total, which have raised a total of $41.4 billion. The average aftermarket return year-to-date is 1%, and the average total return is 14%, compared with -2% and 11% last week.

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

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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