Renaissance Capital's Q1 '19 U.S. IPO Market Review

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Includes: CHNG, LEVI, LYFT, PINS, TW, YJ
by: Renaissance Capital IPO Research
Summary

Only 18 IPOs priced during the quarter, raising $4.7 billion, the slowest quarter by deal count in three years.

After a slow January, IPO activity picked up in late February and continued in March, culminating in the long-anticipated IPOs of Levi's and Lyft.

While overall average quarterly performance was not particularly strong due to a handful of mostly small deals that priced in January and early February, momentum shifted in March, with issuers producing strong returns.

Quiet First Quarter Ends with a Lyft

During the quarter, only 18 IPOs priced, raising $4.7 billion, the slowest quarter by deal count in three years. The sharp December equity market decline and government shutdown contributed to a very slow January, when only one IPO priced. IPO activity picked up in late February and continued in March, culminating in the long-anticipated IPOs of Levi's (LEVI) and Lyft (LYFT).

While overall average quarterly performance was not particularly strong due to a handful of mostly small deals that priced in January and early February, momentum shifted in March, with issuers producing strong returns. This was also reflected in the returns of the IPO index, up 31% for the quarter. IPO activity should be robust in the 2Q due to the large number of companies that have announced plans to go public.

Since Lyft filed at the beginning of March, 17 additional companies have filed with the SEC with total potential deal proceeds of nearly $7 billion, exceeding that raised in this quarter and five of the preceding 12 quarters. Among the largest pending IPOs are photo sharing platform Pinterest (PINS), electronic trading platform Tradeweb (TW), healthcare payment software provider Change Healthcare (CHNG), and Chinese e-commerce site Yunji (YJ). As a result, the second and third quarters look to be very active.

Editor’s Note: The summary bullets for this article were chosen by Seeking Alpha editors.