After a two month-long cold streak, the US IPO market has started to thaw with the successful offerings of Ubiquiti Networks (NASDAQ:UBNT) and ZELTIQ Aesthetics (NASDAQ:ZLTQ), which closed up 17% and 19% respectively on their debuts. While two deals by no means signal a broad opening of the IPO window, it does set a positive precedent that there is interest from investors as long as offerings are pitched at attractive valuations. To that point, both Ubiquiti and ZELTIQ priced below their originally targeted ranges and at sizeable valuation discounts relative to most of their public peers.
Ubiquiti Networks, which provides wireless networking solutions to carriers in underserved markets, raised $106 million on October 13 by offering 7.04 million shares at $15, the low end of the revised $15 to $17 range. The company had originally been planning to sell at $20 to $22. Ubiquiti was the first IPO to price in the U.S. since Chinese online video website Tudou (NASDAQ:TUDO) in mid-August. After closing up 17% in its market debut, Ubiquiti has managed to hold on to its initial gains thus far, and closed Wednesday at $17.65, up 18%. UBS, Deutsche Bank and Raymond James were the lead underwriters on the offering.
ZELTIQ Aesthetics, which markets the CoolSculpting System for the reduction of stubborn fat bulges in the hip area, raised $91 million on October 18 by offering 7 million shares at $13, below the $14 to $16 range. J.P. Morgan and Goldman Sachs were the lead underwriters on the offering.
The warm reception investors gave Ubiquiti and ZELTIQ may provide confidence to the record U.S. backlog of 211 companies, which has been growing despite the two-month long shutdown in IPO activity. At least two more deals, including a hotly debated IPO from Groupon (NASDAQ:GRPN), are rumored to be launching roadshows over the next week.