US ECM activity is likely to wind down early this week as investors eye the coming long weekend, but there are still three IPOs hoping to price before they head off.
Both IPO and secondary outcomes have been decidedly mixed in recent weeks, calling into question the strength of US equity capital markets.
This year’s recovery in IPO activity from 2016’s low base gets another big test when cable operator Wide Open West (US$$419m) software platform Appian (US$81.3m), and memory solutions provider SMART Global (US$79.5m) seek to debut.
Appian and Wide Open West are both slated to be priced on Wednesday and SMART Global is listed as “week of” but will be keen to price by late Wednesday. Few if any IPOs are likely to be launched.
Appian, which grew revenues by 20% last year and made a small profit in the latest quarter, is likely to be the pick of the deals.
That said, it may warrant a discount to other recent software IPOs given its higher reliance on services revenue while it looks to transition to greater subscription-based sales.
The biggest marketing challenge faces SMART Global, which earns about half its revenues from Brazil, whose stock market slumped during the week.
The past week saw just three IPOs raise US$362.2m, led by China’s Bright Scholar Education but again overshadowed by secondary activity.
Marketed follow-ons and blocks raised US$3.8bn, led by Liberty Media/Formula One’s US$1.24bn follow-on.
A slump in US stocks on Wednesday and a sharp increase in the volatility index gave syndicates pause, though markets finished the week in a more positive fashion.
This story will appear in the May 20 issue of IFR Magazine; Reporting By Anthony Hughes