Summer’s Silver Lining

Unfavorable market conditions have been a thorn in the new issuance market’s side this summer. But the Ipreo Blog isn’t talking to clouds on a sunny day. Instead, we’re looking at the silver lining.

For example, thus far in 2015, only about a third of the weeks have seen total proceeds break the $1B mark. Last week was another victim of that trend… until it wasn’t. Five IPOs priced last week for an initial total of $962.6M, but a late over-allotment pushed the overall number above $1B.

Planet Fitness ($248.4M) was the beneficiary of the aforementioned over-allotment, and joins Fitbit and SoulCycle, which just submitted its initial filing, in something of a fitness trend. The week’s largest deal was Amplify Snack Brands ($270.0M), the sixth Consumer Goods debut of the year, making the sector the first to surpass its 2014 deal count. Two Biotech IPOs added to the micro-sector’s previous 24, bringing it closer to last year’s 35 total debuts, and pushed the broader Healthcare sector deal count standings to a total of 48 YTD.

Now, about those unfavorable market conditions…

The two Healthcare offerings mentioned above (Zynerba Pharmaceuticals, $42.0M) and (Aimmune Therapeutics, $184.0M), were the only two debuts to realize a first-day gain of 16.1% and 50.6%, respectively. Meanwhile, SunRun sank 23.1%, Amplify Snack Brands slipped 10.3%, and Planet Fitness ended the day flat, after trading nearly 12.0% below its $16.00 offer price. Of note, this week’s performances brought the average offer/1 day percent change for all 2015 IPOs from 16.8% to 16.3%.

Also feeling those effects is the REIT sector, which for the last few weeks has been waiting in the wings, poised to outdo its five debuts from last year. Unfortunately, recent postponements due to those pesky market conditions has kept this at bay. REIT Riverbanc Multifamily Investors, Inc. ($74.1M), which would have been the sixth debut from the sector, pushed back its debut from last week to this week before eventually postponing indefinitely, along with refinery operator Philadelphia Energy Solutions Inc ($250.0M).

So, where’s the silver lining? Despite a rash of recent postponements and some market turbulence, several sectors are on pace to match or exceed their 2014 hauls, and last week still broke the $1B mark, thanks to Planet Fitness’s late over-allotment. That makes the tenth week (out of 32) that crossed the billion-dollar threshold, which is slightly below the 50% pace set by 2014 and 2013 but is pacing above 2012 (11/52) and 2011 (13/52).

2015 may not be 2014, it’s not exactly 2008 either. So far, 2015 is holding its own.