Jun 25, 2018

The IPO market is on fire

Photo by Spencer Platt/Getty Images

The IPO window is no longer just open. It's been shattered, had its frame removed and is now a chasmal cavity for capital.

Bottom line: This should be the year's busiest week for new U.S. listings, with the boom being driven by factors like political uncertainty and increased M&A activity.

  • U.S. IPO pricings are up 35% over last year, per Renaissance Capital, while proceeds raised and filings are up 33% and 31%, respectively.
  • A dozen companies are set to price this week. And it's a diverse group, including pre-revenue biotechs, an LBO-backed retailer (BJ's Wholesale) and a hairy under-corn (Domo).
  • Ten priced last week (not including three SPACs), many after increasing their number of offered shares.
  • Six companies filed for IPOs last Friday, and Hong Kong this morning got official paper work for Meituan-Dianping, which could be valued at $60 billion.
  • Five of those new offerings were from biopharma companies. Nasdaq says that 30 biopharma issuers have raised $2.5 billion already this year (86% of all healthcare IPO proceeds), competed to 43 raising $4 billion all last year and 32 raising $1.9 billion in 2016.
  • 83% of this year's biopharma IPOs have priced at or above its proposed IPO range, with Nasdaq healthcare listings boss Jordan Saxe saying "crossover investors" are seeking exposure to several different new types of biopharma technology.

IPO insiders are unsure as to why this is happening now as opposed to, say, 12 months ago. After all, it's not like there's been a pullback of private capital alternatives for later-stage companies. But they do offer three drivers:

  1. Strong pricing and aftermarket activity so far in 2018. Renaissance's U.S. IPO index was basically even with the S&P 500 last June, but has easily outpaced it since this past March.
  2. Increased M&A activity, which prompts companies to at least file for IPOs. Or, put another way, chumming the water.
  3. Growing uncertainty about what the 2018 midterms may mean for markets, which is being exacerbated by concerns over trade wars and new restrictions on Chinese investments. There is usually a mini-boom this time of year (getting ahead of August vacations), but this one is more pronounced.

Go deeper

Pentagon watchdog sidelined by Trump resigns

Fine testiying before the Senate Judiciary Committee in 2017. Photo: Drew Angerer/Getty Images

Glenn Fine, the Pentagon's principal deputy inspector general, submitted his resignation on Tuesday.

Why it matters: President Trump removed Fine as the Pentagon's acting inspector general in April 7 after a group of independent federal watchdogs selected him to lead the Pandemic Response Accountability Committee, which was set up to oversee the rollout of the $2 trillion coronavirus relief bill.

Coronavirus dashboard

Illustration: Aïda Amer/Axios

  1. Global: Total confirmed cases as of 12 p.m. ET: 5,534,728 — Total deaths: 347,587 — Total recoveries — 2,260,945Map.
  2. U.S.: Total confirmed cases as of 12 p.m. ET: 1,667,154 — Total deaths: 98,371 — Total recoveries: 379,157 — Total tested: 14,604,942Map.
  3. 2020: Trump pushes for a polarized pandemic election.
  4. States: Michigan Gov. Gretchen Whitmer says "I can’t for the life of me understand" Trump’s antagonism toward her state — New York reports lowest number of new coronavirus deaths since March.
  5. Public health: The final data for remdesivir is in and its benefits are rather limited.
  6. Education: A closer look at how colleges can reopenNotre Dame president says science alone "cannot provide the answer" to reopening.
  7. What should I do? Hydroxychloroquine questions answeredTraveling, asthma, dishes, disinfectants and being contagiousMasks, lending books and self-isolatingExercise, laundry, what counts as soap — Pets, moving and personal healthAnswers about the virus from Axios expertsWhat to know about social distancingHow to minimize your risk.
  8. Other resources: CDC on how to avoid the virus, what to do if you get it, the right mask to wear.

Subscribe to Mike Allen's Axios AM to follow our coronavirus coverage each morning from your inbox.

Updated 41 mins ago - Politics & Policy

New York reports lowest number of daily coronavirus deaths since March

The number of daily new coronavirus cases and deaths reported in New York was the lowest since the state started its lockdown in March, Gov. Andrew Cuomo said Tuesday, calling Memorial Day a "pivot point" for New York.

By the numbers: 73 New Yorkers died from coronavirus in the past 24 hours, and 200 people tested positive. Hospitalizations and intubations also decreased.