6 Operating Companies Have Failed To Price IPOs In 2016

by: Renaissance Capital IPO Research

Two weeks into February, and not a single company with operating revenue has gone public. More IPOs have postponed than priced.

The latest casualties this week were airline concessions operator OTG EXP (NASDAQ:OTG) and waste disposal company Advanced Disposal Services (NYSE:ADSW), which had sought to raise a combined $1 billion. Both highly leveraged companies had insiders selling on the IPO, but these deals had selling points too: OTG accomplished impressive growth in 2015 (~40%), while Advanced Disposal's waste management services is a fairly defensive business.

Six operating companies have postponed IPOs looking to raise $1.3 billion in 2016
Company (Ticker) Business Proposed
Deal Size ($mm)
OTG EXP Airport concession operator $552
Advanced Disposal Services Waste disposal services $450
Elevate Credit (NYSE:ELVT) Online non-prime lending $76
Shimmick Construction Co. (NASDAQ:SCCI) California-based construction company $75
Nordic Realty Trust (NASDAQ:NORT) Norway-based REIT $75
AmeriQuest (AMQ) Financial process services $74

The only deals able to get done have been biotechs supported by heavy insider buying; however, the four biotech IPOs average a return of -7%.

IPO activity through 2/11 in the past three years
2014 2015 2016
Postponed IPOs 0 4 7
Postponed IPO proceeds $0 $0.43 billion $1.37 billion

Investment Disclosure: The information and opinions expressed herein were prepared by Renaissance Capital's research analysts and do not constitute an offer to buy or sell any security. Renaissance Capital, the Renaissance IPO ETF (NYSEARCA:IPO), the Renaissance International IPO ETF (NYSEARCA:IPOS), or the Global IPO Fund (MUTF:IPOSX), may have investments in securities of companies mentioned.