The IPO Candygram – January 2020 – Velocity Financial
Four deals priced last week to start the new year. Three priced at the bottom or below the range and the one that priced in the middle, IMAB, dropped 10% immediately in after market trading. So despite record highs the IPO market was lukewarm last week. These deals were all fairly mediocre as well so we’ve yet to really get a good test of the IPO market in 2020. Here’s the rundown:
Priced Last Week:
Velocity Financial (VEL) – This is a small commercial mortgage lender. We liked the deal as a safer long-term play then some others in this space. Our notes are here: IPO Candy Quick Look: Velocity Financial. Investors were price sensitive on this one and it priced $1 below the range at $13 and traded up some to end the week at $13.51.
Phoenix Tree Holdings (DNK) – This one seems very risky. It’s a short-term rental business in China that aspires to be a “lifestyle brand.” However since they do not control their underlying cost structure it is hard to see how they will ever generate strong returns. They also priced $1 below the range at $13.50 and it ended the week unchanged. That’s just under a $3B valuation.
LIZHI (LIZI) – This company is a podcast platform in China. Revenues will be just over $200M this year and are growing 75% however both gross and net margins are declining. The deal priced at the bottom of the range at $11 and traded up slightly to end the week at $11.63.
I-Mab Biopharma (IMAB) – This Chinese biotech priced in the range at $14 but traded down from there immediately to end the week at $12.50. Seems like a pretty strong management team and advisory board and lots of partnerships around the world. Also the company has 11 compounds in development with 2 in Phase 3. Keeping an eye on this one.
There are no deals scheduled to price this week.
New Filings:
There were only 4 new filings with only two of them being “real”: Atotech (ATC) is a large specialty chemicals company planning a $1B offering with Cit. Revolution Medicines (RVMD) is yet another cancer therapy company.