IPO Market Dries Up This Week

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Of five initial public offerings (IPOs) scheduled for last week, three priced and began trading, one was acquired, and one has withdrawn its filing. There are no IPOs on the calendar for the coming week and it is likely that the following week will be quiet as well due to the President’s Day holiday.

None of last week’s IPOs could be characterized as a resounding success. Two price below the expected midpoint of their range while one price right at it. Foundation Building Materials Inc. (NYSE: FBM) priced 12.8 million shares at $14, 22% below the expected midpoint and got a first-day pop of 11%. The company raised $179 million at a market cap of $599 million. The shares closed their first week of trading up 15% from the IPO price.

Two REITs also entered the public markets last week. Clipper Realty Inc. (NYSE: CLPR) priced 5.7 million shares at 7% below its expected. The New York City realty firm had planned to offer 7.1 million shares. The firm got no first-day pop and closed the week flat to the IPO price of $13.50 after raising $77 million at a market cap of $592 million.

Sachem Capital Corp. (NYSEMKT: SACH), another REIT operating in Connecticut, cut the number of shares on offer from 13 million to 12.6 million, and raised $56 million. The first-day pop was barely 1% and that is where the stock closed the week.

Biotech firm Visterra Inc. withdrew its IPO filing, and Mauser Group was acquired by private equity firm Stone Canyon for $2.3 billion.

Through the week ending February 10, IPO ETF manager Renaissance Capital reported that 14 IPOs have priced in the U.S. so far this year, up 250% year over year. Total proceeds raised through last week equaled $4.6 billion. For 2016, Renaissance Capital reported a total of 105 IPOs, down 38% year over year from 170 in 2015. Total 2016 proceeds amounted to $18.8 billion compared with a 2015 total of $30 billion. Renaissance Capital does not include “best efforts” or blank-check companies in its totals, nor does it include IPOs that raise less than $10 million.