Goldman's (GS) LBO, PSAV, failed to price this week and officially postponed its offering on Friday, reflecting the uncertain environment currently faced by investors.
The IPO market is struggling to build momentum amid market volatility and macroeconomic disturbances. Along with continued talks of a Brexit, the Fed declined to raise rates again, and the VIX Volatility Index spiked midweek, ending Friday above 19 and well above Monday's open. In the last two weeks, four companies have come public, of which two priced substantially below the midpoint (Atkore -24%; Viveve -38%), and only one, Paragon Commercial, had a positive first day (but it only rose 2%). Just seven companies have come public so far this month, well off the pace of 35 IPOs last June.
No support for audiovisual support
PSAV (PSAV) officially postponed its offering on Friday, unable to get the deal done despite slashing the range on Thursday (from $14-$17 to $12-$13) and removing insider selling. Of concern to potential investors are PSAV's flat EBITDA margins, high leverage and cyclicality.
A Paragon of micro-cap
Two small-cap IPOs priced this week, raising $39 million in total. On Wednesday, Paragon Commercial (OTCQX:PBNC) raised $25 million by selling 736,000 shares at $34. The North Carolina bank had been quoted on the OTCQX and is now listed on the Nasdaq. It traded up almost 2% in its first day of trading, and it ended the week up 3%. Viveve Medical (OTC:VIVE), a medical device maker, priced its IPO 38% below the originally proposed price at $5 on Tuesday, raising $14 million to commercialize its non-invasive system for reversing vaginal laxity. It traded down 1% in its debut and ended the week flat.
| IPO Pricings Week of June 13th, 2016 | |||||
| Issuer Business | Deal Size ($mm) | Market Cap ($mm) | Price vs. midpoint | First day return | Return at 6/17 |
