With just a small number of initial public offerings (IPOs) on the calendar for this week, IPO ETF manager Renaissance Capital has issued its review of the 2017 market for IPOs. Volume rose from 105 IPOs in 2016 to 160 this year and proceeds nearly doubled, from $18.8 billion a year ago to $35.6 billion in 2017.
Even though volume improved year over year, 2017’s 160 IPOs is the second-lowest total of the past five years and more than 100 below the 2014 high of 275 new issues. The IPO market raised $85.3 billion that year, the most in the 14 years tracked by Renaissance Capital.
Health care IPOs continued to lead in volume with 47 IPOs in 2017, 29% of the total volume. Tech offerings totaled 37 (23% of the total) but posted the largest capital raise, $9.9 billion.
The year’s 10 largest IPOs raised $12.5 billion (35% of the total) and three raised more than $1 billion in their IPOs: Snap Inc. (NYSE: SNAP) raised $3.4 billion; telecom and media firm Altice USA (NYSE: ATUS) raised $1.98 billion; and real-estate home rental firm Invitation Homes Inc. (NYSE: INVH) raised $1.54 billion. Snap’s first-day pop of 44% was the year’s best, but the firm’s return through last Friday is −7.4%. Altice got a first-day pop of 9% and traded down 36.6% on Friday. Invitation homes had no first-day pop but the shares are up 20.5%.
Overall, the top 10 IPOs posted an average first-day gain of 9%, but by last Friday the overall return was a −5%. Of the 10, an unusually high total of seven have dropped below their issue price.
Of the year’s best performing IPOs, four of the top five were biotechs, and the other was streaming video hardware maker Roku Inc. (NASDAQ: ROKU). The stock with the best return through last Friday is AnaptysBio Inc. (NASDAQ: ANAB), which traded up more than 500% on Friday. Roku had the best first-day pop at nearly 68%.
The worst performing IPOs through Friday were led by medical tech firm Valeritas Holdings Inc. (NASDAQ: VLRX), which traded down more than 67%. Technology management services firm Ameri Holdings Inc. (NASDAQ: AMRH) is down about 63%, coal miner Ramaco Resources Inc. (NASDAQ: METC) is down nearly 63% and meal delivery service Blue Apron Holdings Inc. (NYSE: APRN) closed Friday down nearly 58%.
We’ll have more from the Renaissance Capital review in a later story.