The IPO season is not off to a great start. On Friday, BrightSpring Health Services, a home and community-based healthcare services provider, went public on the Nasdaq, pricing 53.3 million shares at $13, below the price talk of $15-$18. It opened at $12. This was BrightSpring ‘s second IPO attempt. The company originally filed in October 2021 but pulled the deal, according to Renaissance Capital. Kaspi.kz, a Kazakhstan-based “super-app,” went public last week and is still trading slightly below its initial offering price of $92. One of the few 2024 IPO bright spots has been homebuilder Smith Douglas Homes , which went public at the NYSE on Jan. 10 and is 22% above its initial offering price. After two ugly years, big hopes for 2024 The IPO market has been on a roller-coaster ride for the last several years. A record year in 2021 was followed by a disastrous showing in 2022 and 2023: The IPO roller coaster (proceeds in billions) 2021: $142.4 billion 2022: $7.7 billion 2023: $19.4 billion Source: Renaissance Capital This year is not starting off well, both in terms of new issuance and performance of prior IPOs. The Nasdaq is off to a strong start, up nearly 3% this month heading into Friday, but the Renaissance Capital IPO ETF (IPO), a basket of recent debuts, is down 8%. IPO Index notably underperforming the Nasdaq year-to-date is “not encouraging,” Matt Kennedy, senior strategist at Renaissance Capital told me, but then added, “However, I think it’s too early to say. I still think we have enough momentum from last year that these look more like bumps in the road.” The IPO industry is in desperate need of fresh blood. While the IPO ETF has recently added newer names like Kenvue and Arm Holdings, both of which went public last year, many of the largest holdings, including Coupang, Coinbase, Roblox, Rivian and Affirm, are now nearly 3 years old. All are trading down this month.
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