DigitalOcean is the IPO cruise that everyone wants to take this week. The cloud company, which caters to small and medium-sized businesses, is leading an IPO Calendar with 18 names – 15 IPOs in the $100 million-and-up category – and three small-cap offerings. Bankers expect to raise about $5.8 billion, based on mid-point pricing for most of these 18 deals.
SPACs are still rushing to market, even though more than a few have wound up recently as “broken deals” on their first days of trading, with closing prices below their $10 issue price. This week, at least two dozen SPACs were said to be on the cusp of pricing their IPOs. On Monday night alone, 11 SPACs were priced, raising $3.48 billion. On Tuesday night, seven SPACs were on the IPO pricing runway.
“I heard that SPACs may be running out of buyers,” a seasoned IPO pro says.
DigitalOcean Holdings, Inc. (DOCN proposed) is a New York-based digital cloud platform company that serves small and medium-sized businesses. About two-thirds of its customers are outside the United States.
“This is the deal of the week. Get what you can,” an IPO pro says.
Tonight’s the night for DigitalOcean: Its IPO of 16.5 million shares is scheduled for pricing after the closing bell on Tuesday, March 23, 2021, on a $44-to-$47 range. The stock is expected to start trading on Wednesday, March 24, on the New York Stock Exchange.
Morgan Stanley, Goldman Sachs, JPMorgan, BofA Securities, Barclays, KeyBanc Capital Markets, Canaccord Genuity, JMP Securities and Stifel are the joint book-runners and lead managers.
Insider participation in this deal is potentially high, with indications of interest for up to $175 million – or about 23 percent of the deal – from Tiger Global Management and another fund affiliated with an existing shareholder, the prospectus says.
DigitalOcean made its name on simplicity. Its cloud platform is much easier for small and medium-sized business owners to use than the comparable services from Amazon, Google and Microsoft. For an excellent description of DigitalOcean’s business, please see this CNBC story by tech reporter Jordan Novet, published March 15, 2021, and headlined:
DigitalOcean IPO filing plays up ease-of-use vs Amazon, Microsoft (cnbc.com)
Worth noting: DigitalOcean is not yet profitable. The company had a net loss of $43.6 million on revenue of $318.4 million for the last 12 months, according to financial figures in the prospectus.
Car Auction Action
ACV Auctions (ACVA proposed) increased its price range to $20 to $22 early Monday – up from $18 to $20 – and kept the number of shares at 16.6 million for its IPO, set to price tonight (Tuesday night ) for a NASDAQ debut on Wednesday, March 24. The wholesale car auction company is backed by SoftBank.
The Wall Street adage applies: “Increase a deal. Double my order.”
Goldman Sachs, JPMorgan, Citigroup, BofA Securities, Jefferies, Canaccord Genuity, Guggenheim Securities, JMP Securities, Piper Sandler and Raymond James are the joint book-runners.
News on Monday of a federal lawsuit against ACV Auctions did not dampen investors’ enthusiasm for the deal
ACV Auctions, on Cusp of IPO, Sued Over Alleged Bid Rig Scheme (bloomberglaw.com)
The Elastic IPO Calendar
On Monday morning, a handful of biotechs filed terms and landed on this week’s IPO Calendar.
By Tuesday morning, five deals from a variety of sectors had been added to next week’s IPO Calendar.
**For more information, please see our IPO Calendar: IPO Calendar | IPOScoop
The approach of Passover week is not at all slowing down the pace of deals for next week.
Stay tuned.
(For more information about these companies, please click the hyperlinks, which will take you to the IPO profiles on IPOScoop.com.)
(Never trade on proposed symbols. You might wind up owning something on the OTC Bulletin Board.)
Disclosure: Nobody on the IPOScoop.com staff has a position in any stocks mentioned above, nor do they trade or invest in IPOs. The IPOScoop.com staff does not issue advice, recommendations or opinions.
Disclaimer: A SCOOP Rating (Wall Street Consensus of Opening-day Premiums), is a general consensus taken, at press time, from Wall Street and investment professionals concerning how well an IPO might perform when it starts trading. The SCOOP Rating does not reflect the opinions of anyone associated with IPOScoop.com. The SCOOP ratings should not be taken as investment advice. The rating merely reflects the opinion of the professionals at the time of publication and is subject to last-minute changes due to market conditions, changes in a specific offering and other factors, such as changes in the proposed offering terms and the shifting of investor interest in the IPO. The information offered is taken from sources we believe to be reliable, but we cannot guarantee the accuracy.