First Quarter IPOs Worst Since 2009

The month of March yielded 5 initial public offerings (IPOs), not a magnificent total, but more than half of all IPOs in the first quarter. After all, there have been just 8 new public offerings in the first quarter, the least since the first quarter of 2009.

And not only have there been less than two handfuls of IPOS, all 8 have come in the healthcare sector and have raised a combined total of $667 million. In the first quarter of 2015 we saw X IPOs that raised a total of $5.5 billion, while investors coughed up $10.6 billion in the first quarter of 2014.

There was one successful IPO in the holiday-shortened week just ended: Corvus Pharmaceuticals Inc. (NASDAQ: CRVS) priced its IPO at $15, the low end of its range, and raised $71 million. Of that total, $34 million (48% of the proceeds )was attributed to insider buying. That continues a trend we noted in last week’s report.

Through the week ending March 24th, IPO ETF manager Renaissance Capital reported that 8 IPOs have priced in the U.S. so far this year, down about 76% from a year ago. Total proceeds raised through last week equaled $700 million, down nearly 87% compared with the same period in 2015. Of the 8 IPOs that have gone off this year, all have come from the healthcare sector. Last year’s IPO total came in at $30 billion on 170 offerings. Renaissance Capital does not include “best efforts” or blank-check companies in its totals.

One holdover that failed to complete its IPO last week is going to try again this week. No new IPO is on the calendar.

Sensus Healthcare Inc. is a medical device maker specializing in treating non-melanoma skin cancers and other skin conditions with superficial radiation therapy. The company plans to offer 1.8 million shares in an IPO price range of $10 to $12 to raise $20 million at an implied market cap of $91.7 million. Joint bookrunners for the IPO are Joseph Gunnar & Co. and Feltl and Co. Lead manager is Neidiger, Tucker, Bruner, Inc. Shares are scheduled to price Tuesday and begin trading Wednesday on the Nasdaq under the ticker symbol SRTS.

Looking ahead, Renaissance Capital reported that MGM Resorts is sponsoring a REIT offering. MGM Growth Properties has filed for an IPO to raise $100 million. The filing was made confidentially in October of 2015.

Another expected IPO is BATS Global Markets Inc. which operates securities exchanges and other electronic markets. The firm filed an amended Form S-1 in early March, but did not include any pricing or size information.

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