When two of the three major U.S. stock market indexes swing from all-time closing highs into the cavern of a correction in less than two weeks, the IPO calendar can dry up. But maybe not this time around.
This week’s IPO calendar lists seven deals and they expect to raise $556 million. Look for yourself at IPOScoop.com’s IPO calendar. However, there are a few unusual stories among those seven names.
For a moment, let’s look at the stock market’s roller-coaster ride:
- The Dow Jones Industrial Average closed on Thursday, Feb. 8, 2018, at 23,860.46, down 10.4 percent from its record closing high of 26,616.71, set on Friday, Jan. 26.
- The S&P 500 Index closed on Thursday, Feb. 8, at 2,581.00, down 10.2 percent from its record closing high of 2,872.87, set on Friday, Jan. 26.
- The NASDAQ Composite wiggled out from under the 10 percent correction mode. It closed on Thursday, Feb. 8, at 6,777.16, down 9.7 percent from its record closing high of 7,505.77, set on Jan. 26.
Now let’s take a closer look at this week’s IPO traffic and those unusual stories. Worth noting is this cardinal rule of IPO investing: “Read the prospectus.” This week’s group of seven has a lot to tell.
From Frankfurt to New York
To begin with, not all are true IPOs. Two deals that some IPO services call an “IPO” have their underlying shares traded in other securities markets. The prospectus tells you that. They are Biofrontera AG (BFRA – proposed) and Blink Charging (BLNK – proposed).
Biofrontera AG (B8F) has been traded on the Frankfort Stock Exchange since Oct. 3, 2006, under the symbol “B8F,” according to its prospectus. Based in Leverkusen, Germany, the company is a biopharmaceutical company focused primarily on dermatological drugs and dermatologically tested cosmetics to treat skin lesions (actinic keratoses) that can turn into skin cancer.
Blink Charging (CCGI) has been traded on the OTC Pink Current Information Marketplace since July 15, 2008, under the symbol “CCGI,” according to its prospectus. The company provides electric vehicle (EV) charging equipment and networked EV charging services.
Banking on Blank Checks
Two other IPOs are “blank check” offerings.” They are DFB Healthcare Acquisitions (DFBHU – proposed) and Leo Holdings (LHC.U – proposed).
DFB Healthcare Acquisitions is a new face on the calendar. The company was formed recently to focus on the healthcare industry in the United States and other developed countries.
Leo Holdings is a carryover from last week. Its IPO has been reduced to 20 million units at $10 each, down from 30 million units at $10 each. The company is affiliated with Lion Capital, a consumer private equity firm that has invested in brands ranging from Weetabix to Jimmy Choo. Leo Holdings intends to search for a target business in the consumer sector.
Once More – With Feeling
There are two IPOs that have been on the calendar before. They are carryovers. They are Motus GI Holdings (MOTS – proposed) and ProLung (LUNG – proposed).
Motus GI Holdings, based in Israel, is a medical device maker that has developed a single-use medical device system (the “Pure-Vu system”) to connect to standard colonoscopes to help clean a poorly prepared colon during the colonoscopy procedure. This is a carryover from last week.
ProLung, based in Salt Lake City, Utah, is a medical technology company specializing in predictive analytic, early-stage lung cancer risk testing. This has been on and off the calendar for a while.
Rocky Mountain REIT
And the final name on this week’s calendar is a Regulation A+ offering, or Reg A+. The Reg A+ deals are normally offered by what is known as an “Offering Circular,” not by an S-1 prospectus. RegA+ deals are not underwritten. The investment bankers act as selling agents and assume no underwriting obligations. The deal is Aspen REIT (AJAX – proposed).
Aspen REIT is a real estate investment trust (REIT) that plans on acquiring St. Regis Resorts in Colorado upon completion of the offering. The deal is being offered on a “best efforts” basis through an “Offering Circular.”
Let’s look at a recent Reg A+ offering. It is iPic Entertainment (IPIC), a company that operates 121 movie screens through theaters and bars/restaurants at 16 locations in Arizona, California, Florida, Illinois, New Jersey, New York, Texas, Washington and Wisconsin.
On Jan. 31, 2018, iPic Entertainment had some interesting news. An updated offering circular was filed stating, “Recent Developments: Pursuant to the Offering Statement, iPic Entertainment Inc. offered 2,165,000 shares of our Class A Common Stock. On February 1, 2018, we expect to close the Offering with the issuance and sale of 818,429 shares of Class A Common Stock at a public offering price of $18.50 per share.”
In short, the selling agents were not able to place all 2.165 million shares. They sold 818,429 shares.
On Thursday, Feb. 1, 2018, Global Newswire filed a press release announcing that iPic Entertainment closed the offering for 818,429 shares at $18.50 each. The stock opened on Feb. 1 at $17 and closed its opening day at $15.14. On Friday, Feb. 9, iPic closed at $12.99, down 29.8 percent from its IPOI price.
(For more information about these companies and others on the IPO calendar, please check the profiles found on IPOScoop.com’s website.)
Next Week
For the week of Feb. 19, 2018, the calendar is clean and green, but anything can happen when the SEC’s filing window opens again for business on Monday morning.
Stay tuned.
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 opinions.