U.S. IPO Week Ahead: IPO Pipeline Activity Makes Up For An Empty Calendar

There are no IPOs scheduled for the week ahead, but the IPO market is showing some early signs of opening up. Recent biotech IPOs have had strong debuts, SPAC activity has picked up, and a few deals in the pipeline like Albertsons (ACI) and Kingsoft (KC) have signaled potential May IPOs. While volatility is still elevated, the Renaissance IPO Index is soundly outperforming the S&P 500. We also note that despite the empty calendar, all three of April’s biotech IPOs set terms and then priced less than a week later.

This past week’s 61% pop from ORIC Pharmaceuticals (ORIC) provided further proof of the resilience of the biotech industry. Biotechs have been some of the strongest performing recent IPOs and are a key segment of IPOs addressing the changing needs caused by COVID-19.

After a period of inactivity, SPAC pricings, amendments, and new filings have all picked up. DraftKings’ successful SPAC merger added further interest in the space. SPAC executives have even shown a willingness to sweeten their original terms to get deals done, with four recent SPACs increasing the fractional warrants for IPO investors.

Albertsons Companies will hold its quarterly earnings call in the week ahead; strong tailwinds from quarantined shoppers have set the stage for a potential May IPO, which would make it the first large offering in over two months. China-based Kingsoft Cloud also appears poised to launch an IPO as early as the first week of May.

Micro-cap education services provider China Liberal Education Holdings (CLEU) is set to begin trading in the week ahead after raising $8 million at a $38 million market cap on 3/31. The Beijing, China-based company provides primary and secondary-level educational services in China and booked $5 million in revenue for the 12 months ended June 30, 2019.

Street research is expected for two companies and lock-up periods will be expiring for four companies in the week ahead.

IPO Market Snapshot

The Renaissance IPO Indices are market cap weighted baskets of newly public companies. As of 4/23/20, the Renaissance IPO Index was down 4.7% year-to-date, while the S&P 500 was down 13.4%. Renaissance Capital’s IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include Uber (NYSE:UBER) and Spotify (NYSE:SPOT). The Renaissance International IPO Index was down 5.3% year-to-date, while the ACWX was down 21.3%. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include Meituan-Dianping and Adyen.

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Editor’s Note: The summary bullets for this article were chosen by Seeking Alpha editors.

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