Investing

15 Top IPOs to Watch For in 2019

WeWork

WeWork was reported to have taken in a sum of more than $8 billion in 2018 from Softbank and is thriving off the gig and startup economy. The company now caters to companies of all sizes, with short-term or long-term leases for shared office and event space. A December update on how 2018 turned out showed that WeWork’s own data claims it now is in 99 cities and 26 countries, with some 400,000 members across 400 locations globally. For 2018 alone, WeWork also showed that it added 200 locations in 34 new cities and eight new countries. One outside report even showed that WeWork was on the way to becoming the biggest private office tenant in New York City buildings. The company reportedly has indicated it would come public, but when remains to be seen.

International IPO Watch for U.S. Listings — Maybe

The biggest IPO anyone may have ever seen, even compared to Alibaba, would be the Saudi Aramco IPO. This has been on the IPO docket for seemingly an endless period now, and it has been touted as the largest market cap of all companies in the world (even over Apple) in multiple coverages. Most recently, the Saudi kingdom has been under fire for the murder of Jamal Khashoggi, with implications all the way up to the top. With so many nations and companies putting pressure on Saudi Aramco, it seems that the only sure bet for an IPO here would be a return to $100 a barrel oil and a sudden global affinity for Saudi Arabia after a turbulent 2018. Those seem unlikely, and most investors believe that the Saudi Aramco IPO, when it eventually does come, will not even have its primary listing in the United States.

Hexo, a Québec-based licensed producer of marijuana products in Canada, filed its Form F-10 with the SEC in late December of 2018 for an IPO. The company registered total securities valued at $599 million, but its shares already trade on the Toronto Stock Exchange under the ticker symbol HEXO. The company previously was known as Hydropothecary, and it has finalized a joint venture deal with brewer Molson Coors Canada, a subsidiary of Molson Coors Inc. (NYSE: TAP). Molson Coors owns 57.5% of the venture, which has been named Truss, with a wholly owned subsidiary of Hexo owning the remaining 42.5%.

Gateway Casinos & Entertainment, one of the largest and most diversified gaming and entertainment companies in Canada, filed its F-1 for a foreign IPO in late December, and it plans to trade on the New York Stock Exchange under the symbol GTWY. Morgan Stanley had been the sole underwriter listed for this offering, but the company has added Credit Suisse, Goldman Sachs, CIBC Capital Markets, Macquarie Capital and SunTrust Robinson Humphrey. Its operations currently include 26 gaming properties in British Columbia, Ontario and Alberta, with 13,618 slot machines, 429 table games (including 48 poker tables), 561 hotel rooms, 80 food and beverage outlets and 8,500 employees.

China IPOs Coming, Trade War or Not

Futu Holdings is a Chinese online stock broker that was founded by a former Tencent employee and also is backed by Tencent Holdings. The company now plans to raise up to $300 million in a Nasdaq-listed IPO. The company reported a $12.8 million profit on $74.6 million in revenues in the first three-quarters of 2018. It claimed to have 5.3 million users at the end of September, with about 120,000 paying users. Futu primarily targets retail investors in China who trade stocks listed in Hong Kong and the United States.

Coming into the last trading day of 2018, the S&P 500 was down by 8% for the year, versus year-to-date performances of −6.7% for the Dow and −4.6% for the Nasdaq. With six of the prior 10 trading days having drops of over 300 points, the Dow also managed to post its greatest one-day gain ever. Still, reports were out that the month was set to be the worst December stock market performance back to the Great Depression. That can all weigh heavily on an IPO market at the start of a new year.

If the history in recent years acts as an indicator, it would be prudent not to expect every one of these companies to come public, whether or not market conditions are favorable in 2019. Stay tuned.

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