1) Citizens Financial Group, the 13th biggest bank in the U.S., priced its IPO at $21.50, well below the price talk of $23–$25; at $3 billion, this was the second largest IPO of the year;
2) Smart & Final Stores (SFS), a high-end food retailer, priced 13.4 million shares at $12, at the low end of the $12 to $14 range;
3) Medley Management, an asset management firm, priced six million shares at $18, below the $20 to $22 price talk; and
4) CyberArk, an Israeli cyber-security company, was the sole winner. The firm priced 5.4 million shares at $16, well above the price talk of $13–$15.
What happened? What happened was the underwriters are trying to price the deals high, the buyers are pushing back, and the underwriters are being forced to reduce the prices.
Does this mean the IPO market is not working? No, it means that fundamentals do matter, and that prices are becoming more rational. A price reduction does not mean a deal will fail.
On the contrary, pricing Citizens at, say $21.50 instead of $23 will if anything ensure that a deal price will hold.
The bottom line: we are pressing hard on the IPO market. There are a lot of filings in the pipeline, and this will serve notice that underwriters need to price to the market. It is a bifurcated market, for the most part.
On a separate note, there are eight secondaries that priced in addition to the four IPOs.