It wasn’t quite the record windfall it was shaping up to be. But with 15 companies going public, last week was a busy week for IPO offerings.
July closed with a flurry of initial public offerings. In fact, with 34 IPOs, July was the busiest month for the IPO market in at least a decade.
The sheer volume of IPOs is a clear byproduct of a U.S. stock market that has been establishing all-time highs on almost a weekly basis. Companies simply want to jump in the public-trading pool while the water is warm.
That said, despite the flood of recent IPOs, the early returns have been fairly modest. Nine of the 15 new stocks are either down or flat since going public last week.
Here are the biggest winners and losers from the busiest week for IPOs since 2007:
- Mobileye (NYSE: MBLY): Its native country is mired in bloody territorial warfare. But this Israeli developer of camera-based driver assistance systems had a very good first week on the stock market. Shares have already risen 46% despite the IPO pricing well above its expected range at $25. The company raised $890 million in its IPO, and already has a valuation approaching $8 billion.
- Avalanche Biotechnologies (Nasdaq: AAVL): Janet Yellen’s recent comments about biotech stocks being “overvalued” didn’t prevent Avalanche shares from rising 43% in its first few days of public trading. An early-stage biotech developing a form of gene therapy, Avalanche shares are already up to $22.45 after debuting at $17.
- Westlake Chemical Partners (NYSE: WLKP): A producer of ethylene and a spin-off of parent company Westlake Chemical (NYSE: WLK), Westlake shares have risen more than 20% since their debut. The stock looked like a winner from the get-go, pricing at $24 – well above its expected IPO range of $19-$21.
- Bio Blast Pharma (Nasdaq: ORPN): Not all biotechs are created equal. No IPO crashed last week harder than Bio Blast, with shares falling 34% despite pricing at the low end of their expected range. The company develops treatments for rare genetic diseases.
- Macrocure (Nasdaq: MCUR): When an IPO prices at 23% below the low end of its expected range, it’s never a good sign. So it was no surprise that Macrocure shares have fallen 22% since their debut. Interestingly, Macrocure is another biotech with roots in Israel. Clearly, investors preferred Mobileye.
- Vascular Biogenics (Nasdaq: VBLX): Okay, so maybe Janet Yellen’s comments about biotechs were still echoing in investors’ ears last week. Vascular Biogenics, which develops gene therapies for cancer treatment, was yet another biotech that fell flat last week. The stock is down 12.5% since its debut despite pricing a dollar below its expected range.
That so many biotechs went public in one week is no surprise. Biotechs are the ultimate speculative, high-risk sector, and they tend to come in waves when times are good on Wall Street.
The fact that so many of them struggled could be a red flag that the tide has finally turned in U.S. markets.
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