Candygram 10.14.2024

Over the weekend, we published more of a "thought piece" looking at some of the structural challenges for the IPO market that are getting more attention lately due to an excellent presentation from Thomas Laffont of Coatue and some public comments by Jamie Dimon along the lines of "we've made it too hard for companies to do an IPO." Catch up: IPO Purgatory

Sunday morning, I was tearing up watching the fifth launch (and catch) of SpaceX Superheavy. It is simply an awe-inspiring feat that is a welcome relief from the stories of stupidity and incompetence the news seems intent on bringing us. This craft is taller than a football field and can lift 100 tons into space. Let that sink in, and watch the replay: SpaceX Superheavy Launch #5.

Last Week

Six deals priced, raising $1.1B. We highlighted KinderCare $KLC in our last Candygram and confirmed our long position post-IPO at $27. It lacks sizzle, but these are the more significant, safer "slo-mo" IPO names that have done well over the years. Remember Parsons $PSN? Wow. KinderCare is in a different space, but it's not a stretch to say it will be trading at more than 2x the current level in a year.

Two of the three biotechnology names did very well - Upstream $UPB and CeriBell $CBLL priced at the top of the range and traded up 30% and 47%, respectively. Upstream is inflammatory/respiratory, and CeriBell is an intriguing maker of a medical device to diagnose and monitor neurological conditions.

CAMP4 $CAMP was priced low and traded down. It is in the RNA space, which has been struggling, with some analysts calling out Moderna $MRNA as "a zero." It's not our space to cover.

Two "underground" IPO deals, Click Holdings $CLIK and SKK $SKK, got priced. They made it out but traded down sharply after pricing in the range. These small-cap deals are mostly more risky than they are worth. We will consider them potential names for our "Broken Candy" portfolio.

This Week

Today is a federal market holiday, but markets are open while many businesses are closed. It will be a slow week, with only one deal: Heritage Distilling $CASK in marketing.

Thanks to some "non-regular-way" deals, we have a surprise planned for tomorrow that should be an interesting new name in our AI coverage.

Some significant new spinoffs have been announced, with Honeywell $HON planning to spin off its Advanced Materials business as an IPO in the U.S. We'll be uploading the presentation soon. It's a large provider of specialty chemicals and materials with ~$3.8 billion in revenue and high operating margins.

7-11 owner Seven & I plans to carve itself up and spin off some assets via IPO as it fends off bids for the whole business that have topped $40B.