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5 Days of Fireworks, Fizzles for IPOs

Last week saw some monster first-day returns, but several deals' pricings weren't exactly up to snuff


Thanks to the Fourth of July Holiday, there are no initial public offerings planned this week. So instead, in the spirit of the holiday, let’s admire some fireworks instead.

The fireworks, of course, were provided by last week’s slate of IPOS — 10 deals hit the market, and the overall performance was pretty solid.

Company Ticker Return
Noodles & Company NDLS +104%
Prosensa RNA +48%
Aratana Therapeutics PETX +26%
Luxoft Holding LXFT +17%
CDW CDW +9.5%
Silvercrest SAMG +9.1%
HD Supply HDS +4.4%
Esperion Therapeutics ESPR +0.7%
Tremor Video TRMR -10.5%
NanoString Technologies NSTG -20%
Average Return +19%

However, those numbers aren’t nearly as good once you factor in the discrepancies between a few of the original price ranges and their actual IPO pricings.

Company Original Price Range IPO Price
HD Supply $22-$25 $18
CDW $20-$23 $17
Silvercrest $12-$14 $11
NanoString Technologies $13-$15 $10
Tremor Video $11-$13 $10
Aratana Therapeutics $11-$13 $6

Whether it’s because investors are worried about hawkish actions from the Federal Reserve (and the potential for slower growth in the U.S. economy as a result), or just a slew of concerns about those individual companies, there’s no questioning the broader valuation reset shown in that group.

Regardless, not all is so ugly. The equities markets staged a nice comeback last week, and if that bullishness is able to persist in coming weeks, that could help the IPO market get back on track, making some of these deals more blip than trend.

Plus, investors still have a big appetite for high-growth operators, if the Noodles & Company deal is any indication. The fast-casual restaurant chain doling out value-priced noodle dishes across several cultural cuisines has caught on with consumers — and apparently investors, too, as NDLS was bid up by more than double on its first day of trading.

In fact, given the success of the NDLS deal, it’s a good bet we’ll see other fast-casual companies hit the IPO market as well. Some prospects include Potbelly, Smashburger and Jack in the Box (JACK) holding Qdoba.

Tom Taulli runs the InvestorPlace blog IPO Playbook. He is also the author of High-Profit IPO StrategiesAll About Commodities and All About Short Selling. Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.

Article printed from InvestorPlace Media,

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