Is this the week initial public offerings finally get going? It's been a lousy start to the year for IPOs. In the first quarter of 2015, there were 34 deals worth $5.4 billion, half of the 64 deals worth $10.6 billion in the first quarter of last year, according to Renaissance Capital.
That's pretty poor, but here's one important point: The IPOs that have been issued are doing well. The Renaissance Capital IPO ETF, a basket of roughly 60 IPOs that have recently gone public, hit a new high Monday.
This may be the week the number of issues finally starts picking up. There is roughly $1.2 billion worth of deals seeking to price, the second biggest of the year, after the week of Feb. 2, when $1.3 billion priced due to the large master limited partnership deal involving Columbia Pipeline Partners.
Overnight, Ottawa tech company Shopify filed for an IPO of up to $100 million in New York and Toronto.
Also overnight, a well-regarded cancer immunotherapy firm, Aduro Biotech, priced 7 million shares at $17, well above the initial talk of 5 million at $14 to $16. The company leverages patients' immune systems to slow the growth and spread of tumor cells.
On Wednesday evening, three other companies are pricing: Etsy, Party City, and Virtu. All of them (oddly) are from the New York City area. All three have market caps exceeding $1 billion—$2.4 billion for Virtu, $1.9 billion for Party City, and $1.8 billion for Etsy. And while all are in different spaces they all have similar, favorable characteristics: strong cash flow and a leadership position in their respective markets.