Making a Snap Judgment in This Week’s IPO Market

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After two weeks of silence from the initial public offering (IPO) market, expect some fireworks in the coming week. Snap Inc., the parent of social media phenomenon Snapchat, is set to fire off it’s offering on Thursday. There is also a financial services firm set to go public next week.

Through the week ending February 24, IPO ETF manager Renaissance Capital reported that 15 IPOs have priced in the U.S. so far this year, up 275% 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.

First up next week is Hamilton Lane Inc., an alternative asset management firm that claims to have $40 billion in assets under management. The company plans to offer 11.9 million shares in an expected range of $15 to $17 to raise about $190 million at an implied market cap of $824 million. Underwriters for the offering are J.P. Morgan and Morgan Stanley. Shares are expected to price Tuesday and begin trading Wednesday on the Nasdaq under the ticker symbol HLNE.

Snap Inc., parent of Snapchat, is a camera company that offers a wildly popular camera application, Snapchat, and says it believes “that reinventing the camera represents our greatest opportunity to improve the way that people live and communicate.” The company plans to offer 200 million shares in an expected price range of $14 to $16 to raise $3 billion at an implied market cap of $17.54 billion. Underwriters include Morgan Stanley, Goldman Sachs, J.P. Morgan, Deutsche Bank, Barclays, Credit Suisse, and 19 more. Shares are scheduled to price on Wednesday and begin trading Thursday on the New York Stock Exchange under the ticker symbol SNAP.

Website IPO Boutique had this to say about Snap when the company began its roadshow:

Snap Inc. is asking investors to hand over their money and have no voting power. While some tech offerings have been trending toward offering shares with limited voting power, this outright non-voting right shares has never been done to this capacity.

There appears to be little doubt that demand for Snap will be high among small investors and that always makes for an interesting first day or two of trading.