July 2016 went down in Wall Street history with a happy face. All the major U.S. stock market indexes were solid winners and they took the IPO calendar along for the ride.
For July, the Dow Jones Industrial Average gained 2.8 percent, the S&P 500 Index gained 3.6 percent and the Nasdaq Composite Index added a sharp 6.6 percent. That opened the door for the calendar to turn out 11 IPOs that raised over $2.7 billion.(*) July’s traffic was in sharp contrast to June 2016’s volume, which turned out seven IPOs that raised about $649 million.
June’s Headliner
Twilio (TWLO), a cloud-computing platform provider, priced its IPO at $15 on June 23. Twilio closed its opening day, June 24, at $28.79 – and it’s been on a run ever since. Twilio sold as high as $44.80 and closed Friday, July 29, 2016, at $40.63, UP 170.9 percent from its IPO price. That performance by a technology IPO did not go unnoticed.
July’s Headliners
LINE Corporation (LN), a Korean-owned and Tokyo-based provider of mobile messaging services that include free instant messaging, voice calls and video calls, priced its blockbuster IPO of 35 million American Depositary Shares (ADS) at $32.84 each to raise $1.15 billion on July 14. That made it 2016’s third billion-dollar IPO and the year’s largest IPO to date. The ADS closed its opening day, July 15, at $41.58, sold as high as $44.49, and closed Friday, July 29, at $37.53, UP 14.3 percent from its IPO price.
Talend SA (TLND), a provider of a software platform known as Talend Data Fabric, which integrates data and applications in real time across big data and the cloud, priced its IPO at $18 on July 28. Talend started trading Friday, July 29, at $27.66, sold as high as $28, and closed its opening day at $25.50, UP 41.7 percent from its IPO price.
History teaches us that when IPOs from a certain industrial sector perform like these two, it is only a matter of time for others to follow – but not this week.
Three Names to Note
This week’s calendar has six names on it expecting to raise about $701 million. A couple of these offerings are carryovers from past weeks, a few are small-cap deals new to the calendar, and three deals have caught the attention of IPO services. The three names in the spotlight are: At Home Group (HOME – proposed), First Hawaiian (FHB – proposed) and Motif Bio plc (MTFB – proposed).
At Home Group, based in Plano, Texas, is a home décor superstore offering over 50,000 SKUs throughout 115 stores in 29 states and 65 markets. The company offers an assortment of products for any room, in any style, for any budget. Formed in 1979, At Home has about 2,941 employees.
Note: For the 13 weeks ended April 30, 2016, At Home Group reported net income of $7.3 million on sales of $172.1 million versus net income of $1.8 million on sales of $141.2 million for the 13 weeks ended May 2, 2015.
Bankers plan to price about 8.7 million shares at $14 to $16 each on Wednesday evening, Aug. 3, to trade Thursday morning, Aug. 4.
First Hawaiian, based in Honolulu, has roots through its wholly owned bank subsidiary, First Hawaiian Bank, going back to 1858 when it was founded under the name Bishop & Company. It was the first successful banking partnership in the Kingdom of Hawaii and the second-oldest bank formed west of the Mississippi River. Today First Hawaiian Bank believes it is the largest full- service bank headquartered in Hawaii as measured by assets, loans, deposits and net income. First Hawaiian has about 2,094 employees.
Dividend policy: First Hawaiian plans to initiate quarterly cash dividends of 20 cents per share to yield 3.6 percent annually based upon the mid-point of its current price range.
Bankers plan to price about 21.1 million shares at $21 to $23 each on Thursday evening, Aug. 4, to trade Friday morning, Aug. 5.
Note: All of the shares are being sold by a subsidiary of BNP Paribas, First Hawaiian’s parent company, and First Hawaiian will not receive any of the proceeds from the sale of shares by the big French bank group, which is the selling stockholder.
Motif Bio plc, based in New York City, is a clinical stage biopharmaceutical company engaged in the research and development of novel antibiotics designed to be effective against serious and life-threatening infections in hospitalized patients caused by MRSA and other multi-drug-resistant bacteria. Formed in 2009, the company has four employees.
Note: Its ordinary shares have been trading on the AIM Market of the London Stock Exchange since April 2, 2015, under the symbol “MTFB.L”
Bankers plan to price about 2.8 million American Depositary Shares on Thursday evening, Aug. 4, to trade Friday morning, Aug. 5.
Looking into the week of Aug. 8, the calendar was clean and green at press time. But anything could happen on Monday morning, which could set the stage for the following week.
Stay tuned.
(*) This data is based on the U.S. Securities and Exchange Commission filings. Please note: It excludes bank conversions, “best effort” offerings, closed-end funds, companies trading on the OTC markets moving up to the NASDAQ, unit offerings and foreign-traded securities making their debuts in the U.S. capital markets. The latter are public offerings. Investors can buy the underlying shares on foreign exchanges before their U.S. pricing dates.
Disclosure: Neither the author nor anyone else on the IPOScoop.com staff has a position in any stocks mentioned, nor do we trade or invest in IPOs. The author and IPOScoop.com staff do not issue advice, recommendations or opinion.